Question
You are given the following information for Lightning Power Co. Assume the companys tax rate is 30 percent. Debt: 6,000 6.1 percent coupon bonds outstanding,
You are given the following information for Lightning Power Co. Assume the companys tax rate is 30 percent. Debt: 6,000 6.1 percent coupon bonds outstanding, $1,000 par value, 15 years to maturity, selling for 104 percent of par; the bonds make semiannual payments. Common stock: 330,000 shares outstanding, selling for $51 per share; the beta is 1.07. Preferred stock: 11,000 shares of 4 percent preferred stock outstanding, currently selling for $71 per share. Market: 6 percent market risk premium and 4.10 percent risk-free rate. What is the company's WACC?
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