Consider the following information for Evenflow Power Co.,

  

Debt:		3,000 6.5 percent coupon bonds outstanding, $1,000 par value, 18 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
Common stock:		75,000 shares outstanding, selling for $62 per share; the beta is 1.05.
Preferred stock:		9,000 shares of 5.5 percent preferred stock outstanding, currently selling for $105 per share.
Market:		8 percent market risk premium and 4.5 percent risk-free rate.

  

Assume the company's tax rate is 32 percent.

  

Required:

  

Find the WACC.

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC we need to find the cost of each source of ca... View the full answer