Given the following information for Watson Power Co., find the WACC. Assume the company's tax rate is 35 percent.

Debt: 10,000 6.4 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments.

Common stock: 495,000 shares outstanding, selling for $63 per share; the beta is 1.15.

Preferred stock: 35,000 shares of 3.5 percent preferred stock outstanding, currently selling for $72 per share.

Market: 7 percent market risk premium and 3.2 percent risk-free rate.