You are given the following information for Lightning Power Company. Assume the company's tax rate is 22 percent. 17,000 6.6 percent coupon bonds outstanding, $1,000 par value, 26 years to maturity, selling for 106 percent of par; the bonds make semiannual Debt: Common stock: Preferred stock: Market: payments. 500,000 shares outstanding, selling for $68 per share; beta is 1.19. 22,000 shares of preferred stock outstanding, a $100 par value, selling for $89 per share, and dividend is 4.4 percent of par. 7 percent market risk premium and 5.5 percent risk-free rate. What is the company's WACC? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
You are given the following information for Lightning Power Company. Assume the company's tax rate is 22 percent. 17,000 6.6 percent coupon bonds outstanding, $1,000 par value, 26 years to maturity, selling for 106 percent of par; the bonds make semiannual Debt: Common stock: Preferred stock: Market: payments. 500,000 shares outstanding, selling for $68 per share; beta is 1.19. 22,000 shares of preferred stock outstanding, a $100 par value, selling for $89 per share, and dividend is 4.4 percent of par. 7 percent market risk premium and 5.5 percent risk-free rate. What is the company's WACC? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
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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Transcribed Image Text:You are given the following information for Lightning Power Company. Assume the company's tax rate is 22 percent.
Debt:
17,000 6.6 percent coupon bonds outstanding, $1,00e par value, 26 years
to maturity, selling for 186 percent of par; the bonds make semiannual
Common stock:
Preferred stock:
Market:
payments.
500,000 shares outstanding, selling for $68 per share; beta is 1.19.
22,000 shares of preferred stock outstanding, a $100 par value, selling
for $89 per share, and dividend is 4.4 percent of par.
7 percent market risk premium and 5.5 percent risk-free rate.
What is the company's WACC?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
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