Debt: Approximate YTM = [C + (F-P)] / [(F-P)/2] = [32 + (1000-1080)/50] / [(1000+1080)/2] = 2.92%

How is C = 32 in this question?

15. Finding the WACC. Given the following information for Gerken Power Co., find the WACC. Assume the company's tax rate is 35 percent. LO 3 Debt: 15,500 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 $81 per share; beta is 1.20. Preferred stock: 20,000 shares of 4.2 percent preferred stock outstanding, currently selling for $92 per share. 7 percent market risk premium and 3.1 percent risk- 4.2/92 Market: free rate