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Viduka Construction Viduka Construction's CFO wants to estimate the company's WACC. She has collected the following information: The company currently has 20-year bonds outstanding. The
Viduka Construction Viduka Construction's CFO wants to estimate the company's WACC. She has collected the following information: The company currently has 20-year bonds outstanding. The bonds have an 8.5 percent annual coupon, a face value of $1,000, and they currently sell for $945. The company's stock has a beta = 1.20. The market risk premium, km-kRF, equals 5 percent The risk-free rate is 6 percent. The company has outstanding preferred stock that pays a S2.00 annual dividend. The preferred stock sells for $25 a share. The company's tax rate is 40 percent. The company's capital structure consists of 40 percent long-term debt, 40 percent common stock, and 20 percent preferred stock. 4. Refer to Viduka Construction. What is the company's WACC? 2 points
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