Market risk premium and risk-free rate

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Consider the following information for Evenflow Power Co., Debt: 4,500 5.5 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: 90,000 shares outstanding, selling for $55 per share; the beta is 1.06. Preferred stock: 15,500 shares of 4 percent preferred stock outstanding, currently selling for $106 per share. Market: 6 percent market risk premium and 3 percent risk-free rate. Assume the company's tax rate is 33 percent.

Reference no: EM132058251

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