Given the following information for Flintstone power Co, find the WACC. Assume the company's tax rate is 35% Debt:6,000 6% coupon bonds outstanding, $1000 par value, 25 years to maturity, selling for 105 percent of par; the bonds make semi-annual payments Common stock:185,000 shares outstanding, selling for $68 per share. the company's beta is 1.20, the risk-free rate is 5% and the market risk premium is 7% (Ans = 10.15%)
Given the following information for Flintstone power Co, find the WACC. Assume the company's tax rate is 35% Debt:6,000 6% coupon bonds outstanding, $1000 par value, 25 years to maturity, selling for 105 percent of par; the bonds make semi-annual payments Common stock:185,000 shares outstanding, selling for $68 per share. the company's beta is 1.20, the risk-free rate is 5% and the market risk premium is 7% (Ans = 10.15%)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Given the following information for Flintstone power Co, find the WACC. Assume the company's tax rate is 35%
Debt:6,000 6% coupon bonds outstanding, $1000 par value, 25 years to maturity, selling for 105 percent of par; the bonds make semi-annual payments
Common stock:185,000 shares outstanding, selling for $68 per share. the company's beta is 1.20, the risk-free rate is 5% and the market risk premium is 7% (Ans = 10.15%)
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