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Please provide excel equations Given the following information for Watson Power Co., find the WACC. Assume the company's tax rate is 21 percent. Debt: 10,000
Please provide excel equations
Given the following information for Watson Power Co., find the WACC. Assume the company's tax rate is 21 percent. Debt: 10,000 6.4 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Common stock: 495,000 shares outstanding, selling for $63 per share; the beta is 1.15. Preferred stock: 35,000 shares of 3.5 percent preferred stock outstanding, currently selling for $72 per share. Market: 7 percent market risk premium and 3.2 percent risk-free rate. 21% Tax rate Debt Bonds outstanding Settlement date Maturity date Annual coupon rate Coupons per year Bond price (% of par) Redemption value (% of par) Par value 10,000 01/01/00 01/01/25 6.40% 2 108 100 1,000 $ 3 1 Bond price (% of par) Redemption value (% of par) Par value 108 100 1,000 5 $ 5 7 3 Common stock Shares outstanding Beta Share price 495,000 1.15 63 2 3 Preferred stock outstanding Shares outstanding Dividend percentage Share price 35,000 3.50% 1 5 $ 72 5 7 3 Market Market risk premium Risk-free rate 7.00% 3.20% 1 Complete the following analysis. Do not hard code values in your calculations. Leave the "Basis" input blank in the YIELD function. You must use the built-in Excel function to answer this question. 3 7 Market value of debt 5 Market value of equity 7 3 Market value of preferred ) Market value of firm 2 Market value weight of debt 3 Market value of weight equity 1 5 5 Market value of weight preferred 7 3 Pretax cost of debt Aftertax cost of debt 3 Market value of preferred Market value of firm 1 2 Market value weight of debt 3 1 Market value of weight equity 5 Market value of weight preferred 7 3 Pretax cost of debt Aftertax cost of debt 1 2 Cost of equity 3 7 Cost of preferred WACC 2Step by Step Solution
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