You are given the following information for Lighting Power Company. Assume the company's tax rate is 21 percent. Debt: Common stock: Preferred stock: 24,000 shares of 4.8 percent preferred stock outstanding, a $100 par value, currently selling for $93 per share. 5 percent market risk premium and 5.3 percent risk-free rate. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Market: 21,000 7 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. WACC 540,000 shares outstanding, selling for $72 per share; the beta is 1.18. %
You are given the following information for Lighting Power Company. Assume the company's tax rate is 21 percent. Debt: Common stock: Preferred stock: 24,000 shares of 4.8 percent preferred stock outstanding, a $100 par value, currently selling for $93 per share. 5 percent market risk premium and 5.3 percent risk-free rate. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Market: 21,000 7 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. WACC 540,000 shares outstanding, selling for $72 per share; the beta is 1.18. %
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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Question
![You are given the following information for Lighting Power Company. Assume the
company's tax rate is 21 percent.
Debt:
Common
stock:
Preferred
stock:
24,000 shares of 4.8 percent preferred stock outstanding, a $100 par
value, currently selling for $93 per share.
5 percent market risk premium and 5.3 percent risk-free rate.
What is the company's WACC? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Market:
21,000 7 percent coupon bonds outstanding, $1,000 par value, 22 years
to maturity, selling for 108 percent of par; the bonds make semiannual
payments.
WACC
540,000 shares outstanding, selling for $72 per share; the beta is 1.18.
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3aff2365-9f44-4770-b8e3-e2ed0988bbf7%2F258b5bf7-300f-4772-bcf7-3265a2cd0421%2Fxien9g1_processed.png&w=3840&q=75)
Transcribed Image Text:You are given the following information for Lighting Power Company. Assume the
company's tax rate is 21 percent.
Debt:
Common
stock:
Preferred
stock:
24,000 shares of 4.8 percent preferred stock outstanding, a $100 par
value, currently selling for $93 per share.
5 percent market risk premium and 5.3 percent risk-free rate.
What is the company's WACC? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Market:
21,000 7 percent coupon bonds outstanding, $1,000 par value, 22 years
to maturity, selling for 108 percent of par; the bonds make semiannual
payments.
WACC
540,000 shares outstanding, selling for $72 per share; the beta is 1.18.
%
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