Debt 3500 6 percent coupon bonds outstanding 1000 par value


Consider the following information for Evenflow Power Co.,

Debt: 3,500 6 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.

Common stock: 87,500 shares outstanding, selling for $59 per share; the beta is 1.15.

Preferred stock: 10,000 shares of 4.5 percent preferred stock outstanding, currently selling for $106 per share.

Market: 7.5 percent market risk premium and 4 percent risk-free rate.

Assume the company's tax rate is 35 percent.

Required: Find the WACC. (Do not round your intermediate calculations.)

A. 8.55%

B. 9.16%

C. 8.83%

D. 8.33%

E. 8.43%

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Debt 3500 6 percent coupon bonds outstanding 1000 par value
Reference No:- TGS01567696

Expected delivery within 24 Hours