Given the following information for Electric Transport, find the company's tax rate is 21 percent.
Debt: 8,100, 6.9 percent coupon bonds outstanding, $1,000 par value, 17 years to maturity, selling for 101 percent of par, the bonds make semiannual payments.
Common stock: 175,000 shares outstanding, selling for $77 per share, beta is 1.32
Preferred stock: 9,000 shares of $7.50 preferred stock outstanding, currently selling for $73 per share.
Market: 7.9 percent market risk premium and 3.6 percent risk-free rate.
Multiple Choice
10.4%
12.0%
12.4%
10.7%
9.8%
