. Given the following information for Lightning Power Co., find the WACC. Assume the company’s tax rate is 21 percent. Ignore the adjustment for default risk. Debt: 16,500 bonds outstanding with a coupon rate of 6.2%, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Common stock: 535,000 shares outstanding, selling for $81 per share; beta is 1.20. Market: 7 percent market risk premium and 3.1 percent risk-free rate
. Given the following information for Lightning Power Co., find the WACC. Assume the company’s tax rate is 21 percent. Ignore the adjustment for default risk. Debt: 16,500 bonds outstanding with a coupon rate of 6.2%, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Common stock: 535,000 shares outstanding, selling for $81 per share; beta is 1.20. Market: 7 percent market risk premium and 3.1 percent risk-free rate
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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2. Given the following information for Lightning Power Co., find the WACC. Assume the company’s tax rate is 21 percent. Ignore the adjustment for default risk. Debt: 16,500 bonds outstanding with a coupon rate of 6.2%, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Common stock: 535,000 shares outstanding, selling for $81 per share; beta is 1.20. Market: 7 percent market risk premium and 3.1 percent risk-free rate.
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