S-3.5 Since the Enron debacle, energy companies have been viewed cautiously by investors. Research sources show...

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S-3.5 Since the Enron debacle, energy companies have been viewed cautiously by investors. Research sources show that Duke Energy's stock prices have been more stable than most, with a beta of 0.32, but their post-Enron bond rating of BBB has become much lower than the pre-Enron value. Their effective income tax rate is 0.35. As of 2003, Duke's balance sheet shows $20 billion in debt and roughly $15 billion in equity. But there are 900 million shares outstanding, and the price per share is approximately $20, resulting in a market value of the equity of $18 billion. Long-term bonds rated BBB currently earn 6% per year. What is the wacc for Duke energy? S-3.5 Since the Enron debacle, energy companies have been viewed cautiously by investors. Research sources show that Duke Energy's stock prices have been more stable than most, with a beta of 0.32, but their post-Enron bond rating of BBB has become much lower than the pre-Enron value. Their effective income tax rate is 0.35. As of 2003, Duke's balance sheet shows $20 billion in debt and roughly $15 billion in equity. But there are 900 million shares outstanding, and the price per share is approximately $20, resulting in a market value of the equity of $18 billion. Long-term bonds rated BBB currently earn 6% per year. What is the wacc for Duke energy?