You are given the subsequent information for lightning

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Reference no: EM13351956

You are given the subsequent information for Lightning Power Co. Suppose the company's tax rate is 40 percent.

Debt:

10,000 7.7 % coupon bonds outstanding, $1,000 par value, 15 years to maturity, selling for 106 % of par; the bonds make semiannual payments.

Common stock: 490,000 shares outstanding, selling for $67 per share; the beta is 1.10.

Preferred stock:

27,000 shares of 5 % preferred stock outstanding, presently selling for $87 per share.

Market: 8% market risk premium and 5.70 percent risk-free rate.

Evaluate the company's WACC?

Reference no: EM13351956

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