Information on Janicek Power Co., is shown below. Assume the companyâs tax rate is 34 percent. Debt: 9,600 9.1 percent coupon bonds outstanding, $1,000 par value, 24 years to maturity, selling for 98.5 percent of par; the bonds make semiannual payments. Common stock: 221,000 shares outstanding, selling for $84.10 per share; beta is 1.26. Preferred stock: 13,100 shares of 5.8 percent preferred stock outstanding, currently selling for $96.90 per share. Market: 7.05 percent market risk premium and 4.85 percent risk-free rate. Required: What is the company's cost of each form of financing? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Cost Cost of equity % Aftertax cost of debt % Cost of preferred stock % Calculate the company's WACC. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) WACC %
Information on Janicek Power Co., is shown below. Assume the companyâs tax rate is 34 percent. Debt: 9,600 9.1 percent coupon bonds outstanding, $1,000 par value, 24 years to maturity, selling for 98.5 percent of par; the bonds make semiannual payments. Common stock: 221,000 shares outstanding, selling for $84.10 per share; beta is 1.26. Preferred stock: 13,100 shares of 5.8 percent preferred stock outstanding, currently selling for $96.90 per share. Market: 7.05 percent market risk premium and 4.85 percent risk-free rate. Required: What is the company's cost of each form of financing? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Cost Cost of equity % Aftertax cost of debt % Cost of preferred stock % Calculate the company's WACC. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) WACC %
Related questions
Information on Gerken Power Co., is shown below. Assume the companyâs tax rate is 30 percent.
| Debt: | 10,200 8.8 percent coupon bonds outstanding, $1,000 par value, 23 years to maturity, selling for 95.5 percent of par; the bonds make semiannual payments. | |
| Common stock: | 227,000 shares outstanding, selling for $84.70 per share; beta is 1.32. | |
| Preferred stock: | 13,700 shares of 5.85 percent preferred stock outstanding, currently selling for $96.30 per share. | |
| Market: | 7.1 percent market risk premium and 4.9 percent risk-free rate. |
Required:
Calculate the company's WACC. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
WACC %
You are given the following information for Lightning Power Co. Assume the companyâs tax rate is 40 percent.
| Debt: | 7,000 6.2 percent coupon bonds outstanding, $1,000 par value, 15 years to maturity, selling for 105 percent of par; the bonds make semiannual payments. |
| Common stock: | 340,000 shares outstanding, selling for $52 per share; the beta is 1.08. |
| Preferred stock: | 12,000 shares of 5 percent preferred stock outstanding, currently selling for $72 per share. |
| Market: | 8 percent market risk premium and 4.20 percent risk-free rate. |
| What is the company's WACC? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| WACC | % |
| You are given the following information for Lightning Power Co. Assume the companyâs tax rate is 30 percent. |
| Debt: | 6,000 7.9 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. |
| Common stock: | 510,000 shares outstanding, selling for $69 per share; the beta is 1.12. |
| Preferred stock: | 29,000 shares of 4 percent preferred stock outstanding, currently selling for $89 per share. |
| Market: | 10 percent market risk premium and 5.90 percent risk-free rate. |
| What is the company's WACC? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| WACC | % |
