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Consider the following information for Evenflow Power Co., Debt: 3,000 8 percent coupon bonds outstanding, $1,000 par value, 18 years to maturity, selling for 104
Consider the following information for Evenflow Power Co., |
Debt: | 3,000 8 percent coupon bonds outstanding, $1,000 par value, 18 years to maturity, selling for 104 percent of par; the bonds make semiannual payments. | ||
Common stock: | 60,000 shares outstanding, selling for $59 per share; the beta is 1.18. | ||
Preferred stock: | 9,500 shares of 7 percent preferred stock outstanding, currently selling for $106 per share. | ||
Market: | 9 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
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10.84%
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11.01%
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10.74%
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11.24%
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11.86%
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