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9) 30 points Information on Gerken Power Co., is shown below. Assume the company's tax rate is 38 percent. Debt 8,800 8.1 percent coupon bonds
9) 30 points Information on Gerken Power Co., is shown below. Assume the company's tax rate is 38 percent. Debt 8,800 8.1 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 103.5 percent of par; the bonds make semiannual payments Common stock: 213,000 shares outstanding, selling for $83.30 per share; beta is 1.18. Preferred stock: 12,300 shares of 5.9 percent preferred stock outstanding, currently selling for $97.70 per share. Market: 7.15 percent market risk premium and 4.95 percent risk-free rate. What is the company's cost of each form of financing? What is the market value of the firm? Calculate the company's WACC
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