Question
Information on Janicek Power Co., is shown below. Assume the companys tax rate is 40 percent. Debt: 9,900 9.4 percent coupon bonds outstanding, $1,000 par
| Information on Janicek Power Co., is shown below. Assume the companys tax rate is 40 percent. |
| Debt: | 9,900 9.4 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 97 percent of par; the bonds make semiannual payments. |
| Common stock: | 224,000 shares outstanding, selling for $84.40 per share; beta is 1.29. |
| Preferred stock: | 13,400 shares of 5.95 percent preferred stock outstanding, currently selling for $96.60 per share. |
| Market: | 7.2 percent market risk premium and 5 percent risk-free rate. |
| Required: |
| Calculate the company's WACC.
|
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
