Given the following information for Entergy, Inc., find its WACC. Assume Entergy's marginal tax rate is 20% and their average tax rate is 15%. Debt: 3,000 bonds are outstanding with a 7.5% semi-annual coupon and 8 years until maturity. The bonds are currently priced at 102. Common Stock: 75,000 shares outstanding, selling today for $60 per share; the beta is 1.20; Book Value per share is $12. Preferred Stock: 20,000 shares of 6% preferred stock ($100 par) outstanding, currently selling for $63 per share. Market Info: 8 percent market risk premium and 5 percent risk-free rate.
Given the following information for Entergy, Inc., find its WACC. Assume Entergy's marginal tax rate is 20% and their average tax rate is 15%. Debt: 3,000 bonds are outstanding with a 7.5% semi-annual coupon and 8 years until maturity. The bonds are currently priced at 102. Common Stock: 75,000 shares outstanding, selling today for $60 per share; the beta is 1.20; Book Value per share is $12. Preferred Stock: 20,000 shares of 6% preferred stock ($100 par) outstanding, currently selling for $63 per share. Market Info: 8 percent market risk premium and 5 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
Related questions
Question
A4)
Transcribed Image Text:Given the following information for Entergy, Inc., find its WACC. Assume Entergy's marginal tax rate is 20% and their average tax rate is 15%.
Debt: 3,000 bonds are outstanding with a 7.5% semi-annual coupon and 8 years until maturity. The bonds are currently priced at 102.
Common Stock: 75,000 shares outstanding, selling today for $60 per share; the beta is 1.20; Book Value per share is $12.
Preferred Stock: 20,000 shares of 6% preferred stock ($100 par) outstanding, currently selling for $63 per share.
Market Info: 8 percent market risk premium and 5 percent risk-free rate.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education