PLEASE SHOW ALL WORK WITH FORMULAS AND WITHOUT USING EXCEL TO RECEIVE POSITIVE RATING

5. The Saunders Investment Bank has the following financing outstanding. What is the WACC for the company? (Assume that the face value of one bond (for both coupon and zero-coupon bonds) is S1,000, and that semi-annual compounding is used for the zero-coupon bond.) Debt: 60,000 bonds with a coupon rate of 6 percent and a current price quote of 109.5; the bonds have 20 years to maturity. 230,000 zero coupon bonds with a price quote of 17.5 and 30 years until maturity. 150,000 shares of 4 percent preferred stock with a current price of $79, and a par value of $100. 2,600,000 shares of common stock; the current price is S65, and the beta of the stock is 1.15. The corporate tax rate is 40 percent, the market risk premium is 7 percent, and the risk-free rate is 4 percent. Preferred stock: Common stock: Market: 5. The Saunders Investment Bank has the following financing outstanding. What is the WACC for the company? (Assume that the face value of one bond (for both coupon and zero-coupon bonds) is S1,000, and that semi-annual compounding is used for the zero-coupon bond.) Debt: 60,000 bonds with a coupon rate of 6 percent and a current price quote of 109.5; the bonds have 20 years to maturity. 230,000 zero coupon bonds with a price quote of 17.5 and 30 years until maturity. 150,000 shares of 4 percent preferred stock with a current price of $79, and a par value of $100. 2,600,000 shares of common stock; the current price is S65, and the beta of the stock is 1.15. The corporate tax rate is 40 percent, the market risk premium is 7 percent, and the risk-free rate is 4 percent. Preferred stock: Common stock: Market