Consider the following information for Evenflow Power Co., Debt: 3,000 8 percent coupon bonds outstanding, $1,000 par...

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Finance

Consider the following information for Evenflow Power Co.,

  Debt: 3,000 8 percent coupon bonds outstanding, $1,000 par value, 18years to maturity, selling for 104 percent of par; the bonds makesemiannual payments.
  Common stock: 60,000 shares outstanding, selling for $59 per share; the betais 1.18.
  Preferred stock: 9,500 shares of 7 percent preferred stock outstanding,currently selling for $106 per share.
  Market: 9 percent market risk premium and 6.5 percent risk-freerate.

Assume the company's tax rate is 33 percent.

Required:

Find the WACC. (Do not round your intermediatecalculations.)

rev: 09_20_2012
Multiple Choice
10.84%
11.01%
10.74%
11.24%
11.86%

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Firms Market Value Capital Structure Capital Calculation Market Value Capital Structure Weights Debt 3120000 7667000 04069 Preferred Stock 1007000 7667000 01314 Equity 3540000 7667000 04617 Market Value of each capital Structure Debt 3120000 3000 x 1040 Preferred Stock 1007000 9500 x 106 Equity 3540000 60000 x 59 Total See Answer

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