Question
Consider the following information for Evenflow Power Co., Debt: 4,500 5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 104
Consider the following information for Evenflow Power Co., Debt: 4,500 5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 104 percent of par; the bonds make semiannual payments. Common stock: 108,000 shares outstanding, selling for $63 per share; the beta is 1.16. Preferred stock: 13,500 shares of 3.5 percent preferred stock outstanding, currently selling for $105 per share. Market: 6 percent market risk premium and 3 percent risk-free rate. Assume the company's tax rate is 35 percent. Required: Find the WACC. (Do not round your intermediate calculations.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started