Assume the company tax rate is 32 percent

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Reference no: EM131772617

Consider the following information for Evenflow Power Co.,

Debt: 3,500 6.5 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.

Common stock: 84,000 shares outstanding, selling for $59 per share; the beta is 1.16.

Preferred stock: 10,000 shares of 5.5 percent preferred stock outstanding, currently selling for $106 per share.

Market: 8.5 percent market risk premium and 5 percent risk-free rate.

Assume the company's tax rate is 32 percent.

Required:

Find the WACC.

Reference no: EM131772617

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