Given the following information for Lightning Power Co., find the WACC. Assume the companys tax rate is 35 percent.

Debt: 8,000 6.5 percent coupon bonds outstanding. $1,000 par value, 25 years to maturity,

selling for 106 percent of par; the bonds make semiannual payments.

Common stock: 310,000 shares outstanding, selling for $57 per share: the beta is 1.05.

Preferred Stock: 15,000 shares of 4 percent preferred stock outstanding, currently selling for 72 per share.

Market: 7 percent market risk premium and 4.5 percent risk-free rate.

WACC = Kd x Pd + Kpfd x Kpfd + Ke x Pe

The proportions, costs and weighted costs are in decimals to 4 places

Source Market Value Market Proportions Costs Weighted Costs Debt $8,480,000 0.0393 .0122 Preferred 1,080,000 0.0556 Equity 17,670,000 .6489 0.1185 WACC = Total $27230000