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.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter20: Financing With Derivatives

Section: Chapter Questions

Problem 14P

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