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You are given the following information for Watson Power Co. Assume the companys tax rate is 40 percent. Debt: 10,000 7.7 percent coupon bonds outstanding,
You are given the following information for Watson Power Co. Assume the companys tax rate is 40 percent.
Debt: | 10,000 7.7 percent coupon bonds outstanding, $1,000 par value, 15 years to maturity, selling for 106 percent of par; the bonds make semiannual payments. |
Common stock: | 490,000 shares outstanding, selling for $67 per share; the beta is 1.10. |
Preferred stock: | 27,000 shares of 5 percent preferred stock outstanding, currently selling for $87 per share. |
Market: | 8 percent market risk premium and 5.7 percent risk-free rate. |
What is the company's WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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