In: Finance
Consider the following information for Watson Power Co.: Debt: 4,500 9 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 104 percent of par; the bonds make semiannual payments. Common stock: 103,500 shares outstanding, selling for $63 per share; the beta is 1.1. Preferred stock: 15,500 shares of 7.5 percent preferred stock outstanding, currently selling for $107 per share. Market: 10 percent market risk premium and 6.5 percent risk-free rate. Assume the company's tax rate is 34 percent. Find the WACC. Multiple Choice 11.74% 12.24% 12.01% 11.84% 12.9%