The market for beef is in long-run equilibrium at a price of $3.25 per pound. the announcement that mad cow disease has been discovered in the united states reduces the demand for beef sharply, and the price falls to $2.00/pound. if the long-run supply curve is horizontal, then when long-run equilibrium is reestablished the price will be:
a. $5.25 per pound.
b. $3.25 per pound.
c. $1.25 per pound.
d. $2 per pound.
e. greater than $2 per pound, but less than $3.25 per pound.

Information on gerken power co., is shown below. assume the company’s tax rate is 40 percent. debt: 9,400 8.4 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 100.5 percent of par; the bonds make semiannual payments. common stock: 219,000 shares outstanding, selling for $83.90 per share; beta is 1.24. preferred stock: 12,900 shares of 5.95 percent preferred stock outstanding, currently selling for $97.10 per share. market: 7.2 percent market risk premium and 5 percent risk-free rate. required: calculate the company's wacc. (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.) wacc %