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You are given the following information for Watson Power Co. Assume the companys tax rate is 22 percent. Debt: 7,000 5.6 percent coupon bonds outstanding,
| You are given the following information for Watson Power Co. Assume the companys tax rate is 22 percent. |
| Debt: | 7,000 5.6 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 104 percent of par; the bonds make semiannual payments. |
| Common stock: | 400,000 shares outstanding, selling for $58 per share; the beta is 1.09. |
| Preferred stock: | 17,000 shares of 3.4 percent preferred stock outstanding, currently selling for $79 per share. The par value is $100 per share. |
| Market: | 6 percent market risk premium and 4.4 percent risk-free rate.
What is WACC? |
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