Consider the following for watson power company. Debt 5,500 6.5% coupon bonds outstanding. 1,000 par value, 22 years to maturity, selling for 104% of par, semi-annual payments Common Stock 1325,000 shares outstanding selling for $63/share. Beta is 1.19 Preferred Stock 18,000 6% preferred stock outstanding selling for $107/share. Market 8% market risk premium, 6% risk-free rate Company's tax rate is 34% What is WACC?
Consider the following for watson power company. Debt 5,500 6.5% coupon bonds outstanding. 1,000 par value, 22 years to maturity, selling for 104% of par, semi-annual payments Common Stock 1325,000 shares outstanding selling for $63/share. Beta is 1.19 Preferred Stock 18,000 6% preferred stock outstanding selling for $107/share. Market 8% market risk premium, 6% risk-free rate Company's tax rate is 34% What is WACC?
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
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Transcribed Image Text:Consider the following for watson power company. Debt 5,500 6.5% coupon bonds outstanding. 1,000 par
value, 22 years to maturity, selling for 104% of par, semi-annual payments Common Stock 1325,000 shares
outstanding selling for $63/share. Beta is 1.19 Preferred Stock 18,000 6 % preferred stock outstanding
selling for $107/share. Market 8% market risk premium, 6% risk-free rate Company's tax rate is 34% What
is WACC?
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