Consider the following information for Watson Power Company: Debt: Common stock: 6,000 8 percent coupon...
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Consider the following information for Watson Power Company: Debt: Common stock: 6,000 8 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 104 percent of par; the bonds make semiannual payments. 126,000 shares outstanding, selling for $56 per share; the beta is 1.13 17,500 shares of 7 percent preferred stock outstanding, currently selling for $105 per share. 9 percent market risk premium and 6.5 percent risk-free rate. Preferred stock: Market: Assume the company's tax rate is 33 percent. Find the WACC. Multiple Choice 10.59% 10.69% 11.72% 11.09% 10.86%
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