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Common stock:   1 million shares outstanding, $40 per share, $1 par value, beta = 0.8 Preferred...

Common stock:   1 million shares outstanding, $40 per share, $1 par value, beta = 0.8

Preferred stock:   200,000 shares outstanding, $44 per share, $3.50 per share annual dividend

Debt: 10,000 bonds outstanding, $1,000 face value, 8% coupon, 20 yrs to maturity, price = 112% of par

Other: Market return = 14.6%, risk-free rate = 6%, company tax rate = 28%

What is this company's WACC?

A. 8.67%

B. 10.67%

C. 12.33%

D. 9.50%

E. 7.33%

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