Consider the following information for Watson Power Co.: Debt: 4,500 9 percent coupon bonds outstanding, $1,000...

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Consider the following information for Watson Power Co.: Debt:4,500 9 percent coupon bonds outstanding, $1,000 par value, 20years to maturity, selling for 104 percent of par; the bonds makesemiannual payments. Common stock: 103,500 shares outstanding,selling for $63 per share; the beta is 1.1. Preferred stock: 15,500shares of 7.5 percent preferred stock outstanding, currentlyselling for $107 per share. Market: 10 percent market risk premiumand 6.5 percent risk-free rate. Assume the company's tax rate is 34percent. Find the WACC. Multiple Choice 11.74% 12.24% 12.01% 11.84%12.9%

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Answer is 1184 Debt Number of bonds outstanding 4500 Face Value 1000 Current Price 104 1000 Current Price 1040 Value of Debt 4500 1040 Value of Debt 4680000 Annual Coupon Rate 9 Semiannual Coupon Rate 45 Semiannual Coupon 45 1000 Semiannual Coupon 45 Time to Maturity 20 years Semiannual Period to Maturity 40 Let See Answer

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Consider the following information for Watson Power Co.: Debt:4,500 9 percent coupon bonds outstanding, $1,000 par value, 20years to maturity, selling for 104 percent of par; the bonds makesemiannual payments. Common stock: 103,500 shares outstanding,selling for $63 per share; the beta is 1.1. Preferred stock: 15,500shares of 7.5 percent preferred stock outstanding, currentlyselling for $107 per share. Market: 10 percent market risk premiumand 6.5 percent risk-free rate. Assume the company's tax rate is 34percent. Find the WACC. Multiple Choice 11.74% 12.24% 12.01% 11.84%12.9%