What is the company WACC

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Reference no: EM132206330

Question - You are given the following information for Watson Power Co. Assume the company's tax rate is 24 percent.

Debt: 19,000 6.8 percent coupon bonds outstanding, $1,000 par value, 24 years to maturity, selling for 111 percent of par; the bonds make semiannual payments.

Common stock: 520,000 shares outstanding, selling for $70 per share; the beta is 1.21.

Preferred stock: 23,000 shares of 4.6 percent preferred stock outstanding, currently selling for $91 per share. The par value is $100 per share.

Market: 6 percent market risk premium and 5.5 percent risk-free rate.

What is the company's WACC?

Reference no: EM132206330

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