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Given the following information for Entergy, Inc., find its WACC. Assume Entergy's marginal tax rate is 20% and their average tax rate is 15%. Debt: 3,000 bonds are outstanding with a 7.5% semi-annual coupon and 8 years until maturity. The bonds are currently priced at 102. Common Stock: 75,000 shares outstanding, selling today for $60 per share; the beta is 1.20; Book Value per share is $12. Preferred Stock: 20,000 shares of 6% preferred stock ($100 par) outstanding, currently selling for $63 per share. Market Info: 8 percent market risk premium and 5 percent risk-free rate.

Given the following information for Entergy, Inc., find its WACC. Assume Entergy's marginal tax rate is 20% and their average tax rate is 15%. Debt: 3,000 bonds are outstanding with a 7.5% semi-annual coupon and 8 years until maturity. The bonds are currently priced at 102. Common Stock: 75,000 shares outstanding, selling today for $60 per share; the beta is 1.20; Book Value per share is $12. Preferred Stock: 20,000 shares of 6% preferred stock ($100 par) outstanding, currently selling for $63 per share. Market Info: 8 percent market risk premium and 5 percent risk-free rate.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 2P
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Given the following information for Entergy, Inc., find its WACC. Assume Entergy's marginal tax rate is 20% and their average tax rate is 15%. Debt: 3,000 bonds are outstanding with a 7.5% semi-annual coupon and 8 years until maturity. The bonds are currently priced at 102. Common Stock: 75,000 shares outstanding, selling today for $60 per share; the beta is 1.20; Book Value per share is $12. Preferred Stock: 20,000 shares of 6% preferred stock ($100 par) outstanding, currently selling for $63 per share. Market Info: 8 percent market risk premium and 5 percent risk-free rate.
Transcribed Image Text:Given the following information for Entergy, Inc., find its WACC. Assume Entergy's marginal tax rate is 20% and their average tax rate is 15%. Debt: 3,000 bonds are outstanding with a 7.5% semi-annual coupon and 8 years until maturity. The bonds are currently priced at 102. Common Stock: 75,000 shares outstanding, selling today for $60 per share; the beta is 1.20; Book Value per share is $12. Preferred Stock: 20,000 shares of 6% preferred stock ($100 par) outstanding, currently selling for $63 per share. Market Info: 8 percent market risk premium and 5 percent risk-free rate.
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