Given the following information for Electric Transport,find the WACC.Assume the company's tax rate is 34 percent. Debt:
7,500,8.4 percent coupon bonds outstanding.$1,000 par value,22 years to maturity,selling for 103 percent of par,the bonds make semiannual payments.
Common stock:
195,000 shares outstanding,selling for $78 per share,beta is 1.21.
Preferred stock:
11,000 shares of 6.35 percent preferred stock outstanding,currently selling for $76 per share.
Market:
8 percent market risk premium and 5.1 percent risk-free rate.
A) 11.49 percent
B) 12.07 percent
C) 12.42 percent
D) 13.33 percent
E) 13.80 percent
Correct Answer:
Verified
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