LO 3 b. If the aftertax cost of debt is 3.8 percent, what is the 14. Finding the WACC Given the following information for Lightning Powe Co., find the WACC. Assume the company's tax rate is 21 percent. Debt: Common stock: Preferred stock: Market: 16,000 6.2 percent coupon bonds outstanding, $1,000 of par; the bonds make semiannual payments. par value, 25 years to maturity, selling for 108 percent 535,000 shares outstanding, selling for $81 per share; beta is 1.20. 20,000 shares of 4.2 percent preferred stock outstanding, currently selling for $92 per share. The par value is $100. 7 percent market risk premium and 3.1 percent risk-

b. If the aftertax cost of debt is 3.8 percent, what is the 3 14. Finding the WACC Given the following information for Lightning Power Co., find the WACC. Assume the company's tax rate is 21 percent. Debt: Common stock: Preferred slock: Market: 16,0006.2 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. 535,000 shares outstanding, selling for $81 per share: beta is 1.20 . 20,000 shares of 4.2 percent preferred stock outstanding, currently selling for $92 per share. The par value is $100. 7 percent market risk premium and 3.1 percent risk