Given the following information for Lightning Power Co., find the WACC. Assume the company?s tax rate is
Question:
Given the following information for Lightning Power Co., find the WACC. Assume the company?s tax rate is 21 percent.
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16,000 6.2 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Debt: 535,000 shares outstanding, selling for $81 per share; Common stock: beta is 1.20. Preferred stock: 20,000 shares of 4.2 percent preferred stock outstanding, currently selling for $92 per share. The par value is $ 100. 7 percent market risk premium and 3.1 percent risk- Market: free rate.
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We will begin by finding the market value of each type of financing We find MV D 160001...View the full answer
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Related Book For
Essentials of Corporate Finance
ISBN: 978-1260013955
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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