Problem:

You are given the following information for Lightning Power Co. Assume the company's tax rate is 40 percent. Debt: 7,000 6.2 percent coupon bonds outstanding, $1,000 par value, 15 years to maturity, selling for 105 percent of par; the bonds make semiannual payments. Common stock: 340,000 shares outstanding, selling for $52 per share; the beta is 1.08. Preferred stock: 12,000 shares of 5 percent preferred stock outstanding, currently selling for $72 per share. Market: 8 percent market risk premium and 4.20 percent risk-free rate.

Required:

Question: What is the company's WACC?

Note: Provide support for rationale.