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Consider the following information for Watson Power Co.:      Debt: 4,000 8.5 percent coupon bonds outstanding,...

Consider the following information for Watson Power Co.:

  

  Debt: 4,000 8.5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.
  Common stock: 88,000 shares outstanding, selling for $64 per share; the beta is 1.18.
  Preferred stock: 13,000 shares of 7.5 percent preferred stock outstanding, currently selling for $106 per share.
  Market: 9 percent market risk premium and 7.5 percent risk-free rate.

  

Assume the company's tax rate is 34 percent.

     

Find the WACC.

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