You are looking at the following information: Debt: 3,500 5.5 percent coupon bonds outstanding, $1,000 par...

You are looking at the following information:

Debt:	3,500 5.5 percent coupon bonds outstanding, $1,000 par value, 18 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
Common stock:	73,500 shares outstanding, selling for $56 per share; the beta is 1.17.
Preferred stock:	12,500 shares of 4.5 percent preferred stock outstanding, currently selling for $105 per share.
Market:	6.5 percent market risk premium and 4 percent risk-free rate.

The company is in the 32 percent tax rate bracket based on its corporate income.

Required:

Find the WACC

7.42%
8%
7.73%
7.23%
7.33%

Solutions

Expert Solution

jeff jeffy answered 10 months ago

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