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. %
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 1PEB: Brower Co. is considering the following alternative financing plans: Income tax is estimated at 40%...
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