Question
Information on Commonwealth Power Co. is shown below. Assume the company's tax rate is 32%. Debt: 4,500 9% coupon bonds outstanding, $1,000 par value, 20
Information on Commonwealth Power Co. is shown below. Assume the company's tax rate is 32%.
Debt:4,500 9% coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 103% of par; the bonds make semiannual payments.
Common Stock:112,500 shares outstanding, selling for $59 per share; the beta is 1.08.
Market: 10.5% market risk premium and 7% risk-free rate
What is Commonwealth's WACC?(Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations)
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Introduces Quantitative Finance
Authors: Paul Wilmott
2nd edition
470319585, 470319581, 978-0470319581
