Question
Please write detail stepson a the wacc step by step You are given the following information for Watson Power Co.Assume the companys tax rate is
Please write detail stepson a the wacc step by step
You are given the following information for Watson Power Co.Assume the companys tax rate is 40 percent.
Debt: 10,000 6percent coupon bonds outstanding, $1,000 par value, 15 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.
Common stock: 300,000 shares outstanding, selling for $50 per share; the beta is 1.50.
Preferred stock: 15,000 shares of10percent preferred stock outstanding, currently selling for $100per share.
Market:10percent market risk premium and6percenttreasure bill rate.
What is the company's WACC?
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