Given the following information for Jano Corp. find the WACC. Assume the company's tax rate is 35%. Bonds: 10,000 7% coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 102 % of par; the bonds make semi-annual payments. Common Shares: 400,000 shares outstanding, selling for $50 per share; the beta is 1.15. Preferred shares: 25,000 shares of 5% preferred stock outstanding, currently selling for $65 per share. 8% market risk premium and 4% risk-free rate.

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The correct answer is A because the WACC is 9.97%. The WACC is calculated as follows:WACC = (E/V) * Re + (D/V) * Rd * (1 - Tc) + (P/V) * Rpwhere:E = market value of equityV = total value of the firmRe = cost of equityD = market value of debtRd = cost of debtTc = corporate tax rateP = market value of preferred stockRp = cost of preferred stockIn this case, we have:E = 400,000 * $50 = $20,000,000V = $20,000,000 + $10,000,000 + $1,625,000 = $31,625,000Re = 8% + 1.15 * 4% = 12.6%D = $10,000,000Rd = 7% / 2 = 3.5%Tc = 35%P = 25,000 * $65 = $1,625,000Rp = 5%Therefore, the WACC is:WACC = (20,000,000/31,625,000) * 12.6% + (10,000,000/31,625,000) * 3.5% * (1 - 0.35) + (1,625,000/31,625,000) * 5%= 9.97%

Given the Following Information for Jano Corp