Reference no: EM131545924

Consider the following information for Evenflow Power Co.,

Debt: 5,000 6.5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.

Common stock: 120,000 shares outstanding, selling for $62 per share; the beta is 1.11.

Preferred stock: 14,000 shares of 5.5 percent preferred stock outstanding, currently selling for $106 per share.

Market: 7 percent market risk premium and 5 percent risk-free rate.

Assume the company's tax rate is 33 percent.

Required:

Find the WACC. (Do not round your intermediate calculations.)

a. 9.54%

b. 9.19%

c. 8.79%

d. 8.92%

e. 8.69%