Reference no: EM131185469
Consider the following information for Evenflow Power Co.,
Debt: 3,500 6 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.
Common stock: 87,500 shares outstanding, selling for $59 per share; the beta is 1.15.
Preferred stock: 10,000 shares of 4.5 percent preferred stock outstanding, currently selling for $106 per share.
Market: 7.5 percent market risk premium and 4 percent risk-free rate.
Assume the company's tax rate is 35 percent.
Required: Find the WACC. (Do not round your intermediate calculations.)
A. 8.55%
B. 9.16%
C. 8.83%
D. 8.33%
E. 8.43%
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