You are given the following information for Lightning Power Co. Assume the company's tax rate is 22%. Debt: 12000, 6.1% coupon bonds outstanding, $1,000 par value, 27 years to maturity, selling for 109% of par. The bonds make semiannual payments. Common stock: 450,000 shares outstanding selling for $63 per share. The beta is 1.14 Preferred stock: 19,500 shares of 3.9% preferred stock outstanding, currently selling for $84 per share. The Par value is $100 per share. Market: 5% market risk premium and 4.9% risk free rate. What is the company's WACC?
You are given the following information for Lightning Power Co. Assume the company's tax rate is 22%. Debt: 12000, 6.1% coupon bonds outstanding, $1,000 par value, 27 years to maturity, selling for 109% of par. The bonds make semiannual payments. Common stock: 450,000 shares outstanding selling for $63 per share. The beta is 1.14 Preferred stock: 19,500 shares of 3.9% preferred stock outstanding, currently selling for $84 per share. The Par value is $100 per share. Market: 5% market risk premium and 4.9% risk free rate. What is the company's 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
Problem 1PS
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![You are given the following information for Lightning Power Co. Assume the company's tax rate is
22%.
Debt: 12000, 6.1% coupon bonds outstanding, $1,000 par value, 27 years to maturity, selling for
109% of par. The bonds make semiannual payments.
Common stock: 450,000 shares outstanding selling for $63 per share. The beta is 1.14
Preferred stock: 19,500 shares of 3.9% preferred stock outstanding, currently selling for $84 per
share. The Par value is $100 per share.
Market: 5% market risk premium and 4.9% risk free rate.
What is the company's WACC?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fce618159-930e-4ade-8eed-109751c2dc39%2F68b0d28e-9330-4654-9636-572a9de1e64e%2Fyo4z5kr.png&w=3840&q=75)
Transcribed Image Text:You are given the following information for Lightning Power Co. Assume the company's tax rate is
22%.
Debt: 12000, 6.1% coupon bonds outstanding, $1,000 par value, 27 years to maturity, selling for
109% of par. The bonds make semiannual payments.
Common stock: 450,000 shares outstanding selling for $63 per share. The beta is 1.14
Preferred stock: 19,500 shares of 3.9% preferred stock outstanding, currently selling for $84 per
share. The Par value is $100 per share.
Market: 5% market risk premium and 4.9% risk free rate.
What is the company's WACC?
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