The Flying Dove Has 1,600 Bonds Outstanding with a $1,000

Multiple Choice

The Flying Dove has 1,600 bonds outstanding with a $1,000 par value,a coupon rate of 5.5 percent,12 years to maturity,annual interest payments,and a market price equal to par.The firm also has 52,000 shares of common stock outstanding at a price per share of $43 and a beta of 1.3.The risk-free rate is 3 percent,the market risk premium is 7 percent,and the tax rate is 35 percent.What is the company's WACC?

A) 8.54%
B) 10.51%
C) 9.82%
D) 9.37%
E) 7.38%