Business Finance
finance

Question Description

I’m studying for my Business class and need an explanation.

You are given the following information for Lightning Power Co. Assume the company’s tax rate is 35 percent.


 Debt:

8,000 6.5 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 106 percent of par; the bonds make semiannual payments.

 Common stock:310,000 shares outstanding, selling for $57 per share; the beta is 1.05.
 Preferred stock:

15,000 shares of 4 percent preferred stock outstanding, currently selling for $72 per share.

 Market:7 percent market risk premium and 4.5 percent risk-free rate.

What is the company's WACC? (Do not round intermediate calculations and round your answer to
2 decimal places. (e.g., 32.16))


 WACC %  

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Final Answer

ievordzor (181)
University of Maryland

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