Consider the following information for Evenflow Power Co., Debt: 5,500 7.5 percent coupon bonds outstanding,...

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%

Expert Solution

jeff jeffy answered 2 years ago

Consider the following information for Evenflow Power Co., Debt: 5,000 7.5 percent coupon bonds outstanding,...

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