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You are given the following information for Lighting Power Company. Assume the companys tax rate is 21 percent. Debt: 16,000 6.5 percent coupon bonds outstanding,
You are given the following information for Lighting Power Company. Assume the companys tax rate is 21 percent. |
Debt: | 16,000 6.5 percent coupon bonds outstanding, $1,000 par value, 27 years to maturity, selling for 105 percent of par; the bonds make semiannual payments. |
Common stock: | 490,000 shares outstanding, selling for $67 per share; the beta is 1.18. |
Preferred stock: | 21,500 shares of 4.3 percent preferred stock outstanding, a $100 par value, currently selling for $88 per share. |
Market: | 6 percent market risk premium and 5.4 percent risk-free rate. |
What is the company's WACC? |
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