a) What is the value of debt?

b) What is the value of equity.

c) What is the value of preferred equity?

d) What is the capital structure of the firm?

Wd = 40.32%, We = 55.13%, and Wp = 4.55%

Wd = 15.32%, We = 75.13%, and Wp = 9.55%

Wd = 20.32%, We = 75.13%, and Wp = 4.55%

e) What is the cost of debt, that is what is the YTM of the bonds?

f) What is the cost of equity? Pay attention, they give you the risk premium.

g) What is the cost of preferred equity?

h) What is the WACC?

4. Finding the WACC Given the following information for Lightning Power Co., find the WACC. Assume the company's tax rate is 21 percent. Debt: 12,000 bonds with a 4.6 percent coupons outstanding, $1,000 par value, 25 years to maturity, selling for 105 percent of par; the bonds make semiannual payments. Common 5/5,000 shares outstanding, selling tor stock: $81 per share; beta is 1.04. Preferred 30,000 shares of 3.4 percent preferred stock: stock outstanding, a $100 par value, currently selling for $94 per share. Market: 7 percent market risk premium and 3.2 percent risk-free rate