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Calculate the wacc for event flow power co

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Reference no: EM132894455

Given the following information for Event flow Power Co., find the WACC. Assume the company' tax rate is 35 percent.

Debt: 8,000 6.5 percent co upon bond outstanding, $1,000 par value, 20 years to maturity, selling for 92 percent of par; the bonds make semiannual payments. The after-tax cost of debt is 4.72%.

Common stock: 250,000 shares outstanding, selling for $57 per share; the beta is 1.05.

Preferred stock: 15,000 shares of 5 percent preferred stock outstanding, currently selling for $93 per share.

Market: 8 percent market risk premium and 4.5 percent risk-free rate.

Question 1: You are asked to calculate the WACC

Reference no: EM132894455

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