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You are given the following information for Watson Power Co. Assume the company’s tax rate is 38 percent. Debt: 10,000 6.5 percent coupon bonds outstanding, $1,000 par value, 30 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Common stock: 370,000 shares outstanding, selling for $55 per share; the beta is 1.11. Preferred stock: 15,000 shares of 5 percent preferred stock outstanding, currently selling for $75 per share. Market: 6 percent market risk premium and 4.5 percent risk-free rate. What is the company's WACC?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91791942

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