can someone show me step by step on how the got to the answer so I can better un

Question

can someone show me step by step on how the got to the answer so I can better understand the problem please and thanks in advance!

Information on Janicek Power Co, is shown below. Assume the company's tax rate is 35 percent. infomation on Janicek Power Co, is shown below. Assume the company's tax rate is 35 percent Debt 0,000 8.6 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 96.5 percent of par, the bonds make semiannual payments. Common stock: 225,000 shares outstanding, selling for $84.50 per share; beta is 1.30 Preferred stock: 13,500 shares of 5.75 percent preferred stock outstanding, currently selling for $96.50 per share. Market 7 percent market risk premium and 4.8 percent risk-free rate. Required: 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

Explanation / Answer

WACC =10.8085%

WACC =10.8085%

Number of units Value of 1 Unit Total Value Weights Cost of capital WACC Debt 10000 1000 10000000 0.33 5.59 1.843956 Common Shares 225000 84.5 19012500 0.63 13.90 8.717518 Preffered Shares 13500 96.5 1302750 0.04 5.75 0.247097 30315250 10.8085 KD 8.6*(1-0.35) 5.59 KE 1.3*7+4.8 13.9 KP 5.75 5.75

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