Given the following information for Evenflow Power Co., find the WACC. Assume the company's tax rate is

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Given the following information for Evenflow Power Co., find the WACC. Assume the company's tax rate is 35 percent.

Debt: 8,000 6.5 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 92 percent of par; the bonds make semiannual payments.

Common stock: 250,000 shares outstanding, selling for $57 per share; the beta is 1.05.

Preferred stock: 15,000 shares of 5 percent preferred stock outstanding, currently selling for $93 per share.

Market: 8 percent market risk premium and 4.5 percent risk-free rate.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
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Fundamentals of corporate finance

ISBN: 978-0073382395

9th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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