Given the following information for Janicek Power Co., find the WACC. Assume the company's tax rate is

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Given the following information for Janicek Power Co., find the WACC. Assume the company's tax rate is 35 percent

Debt: 8,500 7.2 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 118 percent of par; the bonds make semiannual payments.

Common stock: 225,000 shares outstanding, selling for $87 per share; beta is 1.15.

Preferred stock: 15,000 shares of 4.8 percent preferred stock outstanding, currently selling for $98 per share.

Market: 7 percent market risk premium and 3.1 percent risk-free rate.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
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Essentials of Corporate Finance

ISBN: 978-0078034756

8th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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