Consider the following information for Evenflow Power Co., 4,000 7 percent coupon bonds outstanding, $1,000 par value, 17 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. 84,000 shares outstanding, selling for $59 per share; the Debt: Common stock: beta is 1.17. Preferred stock: 13,000 shares of 6.5 percent preferred stock outstanding, currently selling for $103 per share. 8.5 percent market risk premium and 6 percent risk-free Market: rate. Assume the company's tax rate is 31 percent. Required: Find the WACC. (Do not round your intermediate calculations.)
Consider the following information for Evenflow Power Co., 4,000 7 percent coupon bonds outstanding, $1,000 par value, 17 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. 84,000 shares outstanding, selling for $59 per share; the Debt: Common stock: beta is 1.17. Preferred stock: 13,000 shares of 6.5 percent preferred stock outstanding, currently selling for $103 per share. 8.5 percent market risk premium and 6 percent risk-free Market: rate. Assume the company's tax rate is 31 percent. Required: Find the WACC. (Do not round your intermediate calculations.)
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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Consider the following information for Evenflow Power Co., Debt: Common stock: 4,000 7 percent coupon bonds outstanding, $1,000 par value, 17 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. 84,000 shares outstanding, selling for $59 per share; the beta is 1.17. 13,000 shares of 6.5 percent
Transcribed Image Text:Consider the following information for Evenflow Power Co.,
4,000 7 percent coupon bonds outstanding, $1,000 par
value, 17 years to maturity, selling for 102 percent of par; the
bonds make semiannual payments.
84,000 shares outstanding, selling for $59 per share; the
Debt:
Common stock:
beta is 1.17.
Preferred stock:
13,000 shares of 6.5 percent preferred stock outstanding,
currently selling for $103 per share.
8.5 percent market risk premium and 6 percent risk-free
Market:
rate.
Assume the company's tax rate is 31 percent.
Required:
Find the WACC. (Do not round your intermediate calculations.)
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