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PLEASE READ ALL OF THE TEXT AND PROVIDE THE EXACT FORMULAS FOR EXCEL. THANK YOU! Given the following information for Watson Power Co., find the
PLEASE READ ALL OF THE TEXT AND PROVIDE THE EXACT FORMULAS FOR EXCEL. THANK YOU!
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 $ Common stock Shares outstanding Beta Share price 495,000 1.15 63 $ Preferred stock outstanding Shares outstanding Dividend percentage Share price 35,000 3.50% 72 $ Market Market risk premium Risk-free rate - 7.00% 3.20% 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. Market value of debt Market value of equity Market value of preferred Market value of firm Market value weight of debt Market value of weight equity Market value of weight preferred Pretax cost of debt Aftertax cost of debt Cost of equity Cost of preferred WACCStep by Step Solution
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