Reference no: EM131328666
Consider the following information for Evenflow Power Co.,
Debt: 5,000 5 percent coupon bonds outstanding, $1,000 par value, 18 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.
Common stock: 125,000 shares outstanding, selling for $62 per share; the beta is 1.2.
Preferred stock: 15,500 shares of 4 percent preferred stock outstanding, currently selling for $106 per share.
Market: 7 percent market risk premium and 4 percent risk-free rate. Assume the company's tax rate is 34 percent.
Required: Find the WACC. (Do not round your intermediate calculations.)
A) 8.11% B) 8.67% C) 8.51% D) 8.01% E) 8.22%
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