Problem 12-15 Finding the WACC [LO 3] 8,600 7.9 percent coupon bonds outstanding
ID: 2698920 • Letter: P
Question
Problem 12-15 Finding the WACC [LO 3]
8,600 7.9 percent coupon bonds outstanding, $1,000 par value, 24 years to maturity, selling for 104.5 percent of par; the bonds make semiannual payments.
12,100 shares of 5.80 percent preferred stock outstanding, currently selling for $97.9 per share.
Calculate the WACC. (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)
Information on Janicek Power Co., is shown below. Assume the company%u2019s tax rate is 34 percent.Explanation / Answer
WACC = Weight of Equity *cost of equity + Weight of Debt*cost of debt Cost of Equity = Risk Free Eate + Beta