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Given the following information for Jano Corp., find the Weighted Average Cost of Capital (WACC). Assume...

Given the following information for Jano Corp., find the Weighted Average Cost of Capital (WACC). Assume the company's tax rate is 35%.  

  • Bonds: 10,000 8% coupon bonds outstanding, $1,000 par value, 20 years to maturity, currently selling for $980; the bonds make semi-annual payments
  • Common Shares: 300,000 shares outstanding, selling for $50 a share; the beta is 1.25
  • Preferred Shares: 25,000 shares of 5% preferred stock outstanding with a $100 par value, currently selling for $75 per share.

The market risk premium is 7% and the prevailing risk-free rate is 3%.

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