Debt and preferred stock and common stock and market

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Reference no: EM13731420

You are given the following information for Lightning Power Co. Assume the company’s tax rate is 40 percent.

Debt: 10,000 7.1 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 107 percent of par; the bonds make semi-annual payments.

Common stock: 430,000 shares outstanding, selling for $61 per share; the beta is 1.04.

Preferred stock: 21,000 shares of 5 percent preferred stock outstanding, currently selling for $81 per share.

Market: 10 percent market risk premium and 5.10 percent risk-free rate.

What is the company's WACC?

Reference no: EM13731420

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