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Question 19-22 are based on the following information Given the following information for Gerken Power Co. And the WACC. Assume the company's tax rate is
Question 19-22 are based on the following information Given the following information for Gerken Power Co. And the WACC. Assume the company's tax rate is 35 percent. Debt: 15.500 8.45 coupon bonds outstanding. $1.000 par value, 25 years to maturity, selling 107% of par, the bonds make semiannual payments Common stock 495.000 shares outstanding, selling for $82 per share; beta is 1.20. Preferred stock 20.000 shares of 4.20 preferred stock outstanding, currently selling for $90 per share. Market: 7 market risk premium and 3.10% risk free rate. What is the cost of preferred stock
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