Consider the following information for Evenflow Power Co., Debt: 2,500 5.5 percent coupon bonds outstanding, $1,000 par...

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Finance

Consider the following information for Evenflow Power Co.,

  Debt: 2,500 5.5 percent coupon bonds outstanding, $1,000 par value,20 years to maturity, selling for 104 percent of par; the bondsmake semiannual payments.
  Common stock: 50,000 shares outstanding, selling for $63 per share; the betais 1.12.
  Preferred stock: 9,000 shares of 4.5 percent preferred stock outstanding,currently selling for $105 per share.
  Market: 7 percent market risk premium and 4 percent risk-freerate.

Assume the company's tax rate is 31 percent.

Required:

Find the WACC. (Do not round your intermediatecalculations.)
8.19%
7.68%
7.46%
7.96%
7.56%

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3.9 Ratings (599 Votes)

Coupon 0055 1000 2 275 Number of periods 20 2 40 Price 104 1000 1040 Yield to maturity 51766 Keys to use in a financial calculator 2nd IY 2 FV 1000 PV 1040 N See Answer

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Consider the following information for Evenflow Power Co., Debt:2,500 5.5 percent coupon bonds outstanding, $1,000 par value,20 years to maturity, selling for 104 percent of par; the bondsmake semiannual payments. Common stock:50,000 shares outstanding, selling for $63 per share; the betais 1.12. Preferred stock:9,000 shares of 4.5 percent preferred stock outstanding,currently selling for $105 per share. Market:7 percent market risk premium and 4 percent risk-freerate. Assume the company's tax rate is 31 percent. Required: Find the WACC. (Do not round your intermediatecalculations.)8.19%7.68%7.46%7.96%7.56%


Debt:		2,500 5.5 percent coupon bonds outstanding, $1,000 par value,20 years to maturity, selling for 104 percent of par; the bondsmake semiannual payments.
Common stock:		50,000 shares outstanding, selling for $63 per share; the betais 1.12.
Preferred stock:		9,000 shares of 4.5 percent preferred stock outstanding,currently selling for $105 per share.
Market:		7 percent market risk premium and 4 percent risk-freerate.