Question
Given the following information for Teralba Wind Farm Limited find the WACC. Assume the companys tax rate is 30 per cent. Debt: 15000 bonds with
Given the following information for Teralba Wind Farm Limited find the WACC. Assume the companys tax rate is 30 per cent. Debt: 15000 bonds with a 5.8 per cent coupon outstanding, $1000 face value, 25years to maturity, selling for 108 per cent of face value; the bonds make semi-annual payments and YTM = 5.22% Common shares: 575000 shares outstanding, selling for $64 per share; the beta is1.09 Preference shares: 35000 shares of 2.8 per cent preference shares outstanding,currently selling for $65 per share. Market: 7 per cent market risk premium and 3.2 per cent risk-free rate.
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