Question

Given the following information for Huntington Power Co., find the WACC. Assume the company’s tax rate is 35 percent.
Debt: 5,000 6 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.
Common stock: 175,000 shares outstanding, selling for $58 per share; the beta is 1.10.
Market: 7 percent market risk premium and 5 percent risk-free rate.



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  • CreatedAugust 28, 2014
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