Given the following information for Watson Power Co., find the WACC. Assume the company’s tax rate is 21%. Debt: 15,000 bonds with a 5.8 percent coupon outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments Common Stock: 575,000 shares outstanding, selling for $64 per share; the beta is 1.09. Preferred Stock: 35,000 shares of 2.8 percent preferred stock outstanding, currently selling for $65 per share. Market: 7 percent market risk premium and 3.2 percent risk-free rate. Please complete on excel and show excel formulas!
Given the following information for Watson Power Co., find the WACC. Assume the company’s tax rate is 21%. Debt: 15,000 bonds with a 5.8 percent coupon outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments Common Stock: 575,000 shares outstanding, selling for $64 per share; the beta is 1.09. Preferred Stock: 35,000 shares of 2.8 percent preferred stock outstanding, currently selling for $65 per share. Market: 7 percent market risk premium and 3.2 percent risk-free rate. Please complete on excel and show excel formulas!
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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Given the following information for Watson Power Co., find the WACC. Assume the company’s tax rate is 21%.
Debt: 15,000 bonds with a 5.8 percent coupon outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments
Common Stock: 575,000 shares outstanding, selling for $64 per share; the beta is 1.09.
Market: 7 percent market risk premium and 3.2 percent risk-free rate.
Please complete on excel and show excel formulas!
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