You are given the following information for Fiala Industries

You are given the following information for Fiala Industries

• Debt: 7000 8.5 % coupon bonds outstanding, with 20 years to maturity and a quoted price of 98. The bonds pay interest semiannually.

• Common stock: 220,000 shares of common stock selling for $60 per share. The stock has a beta of .90 and will pay a dividend of $1.80 next year. The dividend is expected to grow at 6% per year indefinitely.

• Preferred stock: 9000 shares of 6.5% preferred stock selling at $94 per share.

• Market: A 12% expected return, a 5% risk free rate and a 35% tax rate.

What is the WACC for Fiala Industries