You are given the following information for Watson Power Co. Assume the companys tax rate is 21 percent.

Debt:
6,000 5.5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.

Common stock: 390,000 shares outstanding, selling for $57 per share; the beta is 1.14.

Preferred stock:
16,500 shares of 3.3 percent preferred stock outstanding, currently selling for $78 per share. The par value is $100 per share.

Market:
5 percent market risk premium and 4.3 percent risk-free rate.

What is the company's WACC?

Question

You are given the following information for Watson Power Co. Assume the companys tax rate is 21 percent.

Debt:

6,000 5.5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.

Common stock:

390,000 shares outstanding, selling for $57 per share; the beta is 1.14.

Preferred stock:

16,500 shares of 3.3 percent preferred stock outstanding, currently selling for $78 per share. The par value is $100 per share.

Market:

5 percent market risk premium and 4.3 percent risk-free rate.

What is the company's WACC?

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You are given the following information for Watson Power Co. Assume the companys tax rate is 21 percent. Debt: 6,000 5.5 percent coupon bonds outstanding,

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