Given the following information for Tara Ita Power Co., find the WACC. Assume the companys tax rate

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Given the following information for Tara Ita Power Co., find the WACC. Assume the company’s tax rate is 21 percent.

Debt: 7,000 5 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.

Common stock: 180,000 shares outstanding, selling for $58 per share; the beta is .85.

Market: 6.5 percent market risk premium and 4.3 percent risk-free rate.

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Corporate Finance Core Principles And Applications

ISBN: 9781260571127

6th Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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Question Posted: Nov 13, 2020 05:03 AM

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Given the following information for Tara Ita Power Co., find the WACC. Assume the companys tax rate

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Corporate Finance Core Principles And Applications

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