In: Finance
Consider the following information for Evenflow Power Co., |
Debt: | 5,500 7.5 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. | ||
Common stock: | 126,500 shares outstanding, selling for $62 per share; the beta is 1.05. | ||
Preferred stock: | 17,000 shares of 7 percent preferred stock outstanding, currently selling for $103 per share. | ||
Market: | 9 percent market risk premium and 7 percent risk-free rate. | ||
Assume the company's tax rate is 34 percent. |
Required: |
Find the WACC. (Do not round your intermediate calculations.) |
A.11.05%
B.10.95%
C.11.97%
D.11.13%
E.11.45%