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Consider the following information for Evenflow Power Co., Debt: 2,000 8 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 105

Consider the following information for Evenflow Power Co.,

Debt: 2,000 8 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.
Common stock: 50,000 shares outstanding, selling for $57 per share; the beta is 1.06.
Preferred stock: 6,500 shares of 7 percent preferred stock outstanding, currently selling for $107 per share.
Market: 9.5 percent market risk premium and 6.5 percent risk-free rate.

Assume the company's tax rate is 33 percent.

Required:

Find the WACC. (Do not round your intermediate calculations.)

rev: 09_20_2012

Multiple Choice

  • 11.04%

  • 11.24%

  • 10.94%

  • 11.96%

  • 11.44%

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