You are given the following information for Watson Power Co. Assume the companys tax rate is 25

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You are given the following information for Watson Power Co. Assume the company’s tax rate is 25 percent.

Debt: 25,000 7.4 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 106 percent of par; the bonds make semiannual payments.

Common stock: 580,000 shares outstanding, selling for $76 per share; the beta is 1.15.

Preferred stock: 26,000 shares of 5.2 percent preferred stock outstanding, currently selling for $97 per share.

The par value is $100 per share. Market: 6 percent market risk premium and 4.8 percent risk-free rate.

What is the company's WACC?

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Bank Management

ISBN: 978-1133494683

8th edition

Authors: Timothy W. Koch, S. Scott MacDonald

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Posted Date: Sep 02, 2020 12:46 AM

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You are given the following information for Watson Power Co. Assume the companys tax rate is 25

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Bank Management

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