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Business, 07.05.2021 01:00 bhaddieraven

Information on Lightning Power Co., is shown below. Assume the company’s tax rate is 22 percent. Debt:
18,200 6.1 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 107.8 percent of par; the bonds make semiannual payments.

Common stock:620,000 shares outstanding, selling for $85.25 per share; beta is 1.15.

Preferred stock:
28,500 shares of 4.25 percent preferred stock outstanding, currently selling for $92.70 per share. The par value is $100.

Market:6.8 percent market risk premium and 3.4 percent risk-free rate.

What is the company's cost of each form of financing?
-cost of equity: %
-after tax cost of debt: %
-cost of preferred stock: %

Calculate the company’s WACC.

*Please show work/explain*

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Answers: 1

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Information on Lightning Power Co., is shown below. Assume the company’s tax rate is 22 percent. D...
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