Question
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
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 stock: 575,000 shares outstanding, selling for $81 per share; beta is 1.04.
Preferred stock: 30,000 shares of 3.4 percent preferred 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.
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