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Consider the following information for Watson Power Co.:      Debt: 4,000 6.5 percent coupon bonds outstanding,...

Consider the following information for Watson Power Co.:

  

  Debt: 4,000 6.5 percent coupon bonds outstanding, $1,000 par value, 17 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
  Common stock: 88,000 shares outstanding, selling for $61 per share; the beta is 1.09.
  Preferred stock: 12,500 shares of 5.5 percent preferred stock outstanding, currently selling for $105 per share.
  Market:

8 percent market risk premium and 4.5 percent risk-free rate.

Assume the company's tax rate is 35 percent.

     

Find the WACC.

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