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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 |
WACC | % |

Final Answer








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