Question
Information on Janicek Power Co., is shown below. Assume the companys tax rate is 35 percent. Debt: 9,000 8 percent coupon bonds outstanding, $1,000 par
Information on Janicek Power Co., is shown below. Assume the companys tax rate is 35 percent. Debt: 9,000 8 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 102.5 percent of par; the bonds make semiannual payments. Common stock: 215,000 shares outstanding, selling for $83.50 per share; beta is 1.20. Preferred stock: 12,500 shares of 5.75 percent preferred stock outstanding, currently selling for $97.50 per share. Market: 7 percent market risk premium and 4.8 percent risk-free rate. Required: Calculate the company's WACC. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started