The Saunders Investment Bank has the following financing outstanding. Debt: 160,000 bonds with a coupon...
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The Saunders Investment Bank has the following financing outstanding. Debt: 160,000 bonds with a coupon rate of 12 percent and a current price quote of 113.0; the bonds have 20 years to maturity. 330,000 zero coupon bonds with a price quote of 15.5 and 30 years until maturity. Preferred stock: 250,000 shares of 10 percent preferred stock with a current price of $66, and a par value of $100 Common stock: 3, 600,000 shares of common stock; the current price is $52, and the beta of the stock is 85. Market: The corporate tax rate is 40 percent, the market risk premium is 7 percent, and the risk-free rate is 4 percent. What is the WACC for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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