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

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Finance

You are given the following information for Cleen Power Co.Assume the company’s tax rate is 38 percent. Debt: 9,000 7.6percent coupon bonds outstanding, $1,000 par value, 30 years tomaturity, selling for 105 percent of par; the bonds make semiannualpayments. Common stock: 480,000 shares outstanding, selling for $66per share; the beta is 1.09. Market: 9 percent market risk premiumand 5.6 percent risk-free rate. What is the company's WACC?

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4.2 Ratings (762 Votes)
MV of equityPrice of equitynumber of shares outstanding MV of equity66480000 31680000 MV of BondPar valuebonds outstandingage of par MV of Bond10009000105    See Answer
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You are given the following information for Cleen Power Co.Assume the company’s tax rate is 38 percent. Debt: 9,000 7.6percent coupon bonds outstanding, $1,000 par value, 30 years tomaturity, selling for 105 percent of par; the bonds make semiannualpayments. Common stock: 480,000 shares outstanding, selling for $66per share; the beta is 1.09. Market: 9 percent market risk premiumand 5.6 percent risk-free rate. What is the company's WACC?

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