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Information on Lightning Power Company, is shown below. Assume the companys tax rate is 25 percent. Debt: 18,000 5.8 percent coupon bonds outstanding, $1,000 par
Information on Lightning Power Company, is shown below. Assume the companys tax rate is 25 percent.
Debt: | 18,000 5.8 percent coupon bonds outstanding, $1,000 par value, 23 years to maturity, selling for 107.6 percent of par; the bonds make semiannual payments. |
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Common stock: | 610,000 shares outstanding, selling for $84.75 per share; beta is 1.05. |
Preferred stock: | 27,500 shares of 4.45 percent preferred stock outstanding, currently selling for $92.50 per share. The par value is $100. |
Market: | 6.8 percent market risk premium and 3.4 percent risk-free rate. |
What is the company's cost of each form of financing?
cost of equity?
Aftertax cost of debt?
Cost of preferred Stock?
calculate the company's WACC
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