Question
Information on lightening power Co. is show below. Assume the company's tax rate is 24 percent. DEBT: 16,900 5.9 percent coupon bonds outstanding, $1000 par
Information on lightening power Co. is show below. Assume the company's tax rate is 24 percent.
DEBT: 16,900 5.9 percent coupon bonds outstanding, $1000 par value, 26 years to maturity, selling for 106.5 percent of par; semi annual payments
COMMON STOCK: 555,000 shares outstanding, selling for $82.00 per share; Beta is 1.20
PREFERRED STOCK: 22,000 shares of 4.2 percent preferred stock outstanding, currently selling for $91.40 per share. the par value is $100.
MARKET: 6.5 percent market risk premium and 3.1 percent risk-free rate.
A.) What is the company's cost of each form of financing?
B.) Calculate the company's WACC.
Show all work, Please and thank you :)
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