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Information on Commonwealth Power Co. is shown below. Assume the companys tax rate is 32%. Debt : 4,500 9% coupon bonds outstanding, $1,000 par value,
Information on Commonwealth Power Co. is shown below. Assume the companys 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 Commonwealths WACC?(Answer should be in decimal form with the zero in front of the decimal. Round answer to 4 decimal places, round any intermediate calculations to 5 decimal places, round interest rates and weights in their decimal form).
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