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Dmonstrate what is the company wacc

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Question 1: Given the following information, what is the company's WACC?

Common stock: 1 million shares outstanding, $40 per share, $1 par value, beta =1.3.

Bonds: 10,000 bonds outstanding $1,000 face value each, 8% annual coupon, coupons paid semiannually, 22 years to maturity, market price =$1,101.23 per bond.

Preferred stock: 50,000 shares, $7 coupon payment, market price=$108, par value $100

Market risk premium=8.6%, risk free rate=4.5%, marginal rate tax rate=34%.

Reference no: EM132568476

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