Information for evenflow power co

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Consider the following information for Evenflow Power Co.,

Debt: 4,000 7 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.

Common stock: 92,000 shares outstanding, selling for $56 per share; the beta is 1.15.

Preferred stock: 12,500 shares of 6.5 percent preferred stock outstanding, currently selling for $105 per share.

Market: 7.5 percent market risk premium and 6.5 percent risk-free rate.   Assume the company's tax rate is 33 percent.

Required:

Find the WACC. (Do not round your intermediate calculations.)

  • 10.28%
  • 10.75%
  • 10%
  • 9.78%
  • 9.88%

Reference no: EM131478447

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