You are given the following information for Lightning Power Co. Assume the company’s tax rate is 40 percent.
Debt: 10,000 7.1 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 107 percent of par; the bonds make semi-annual payments.
Common stock: 430,000 shares outstanding, selling for $61 per share; the beta is 1.04.
Preferred stock: 21,000 shares of 5 percent preferred stock outstanding, currently selling for $81 per share.
Market: 10 percent market risk premium and 5.10 percent risk-free rate.
What is the company's WACC?