Question

Information on Huntington Power Co. is shown below. Assume the company’s tax rate is 35 percent.
Debt:
3,000 7.5 percent coupon bonds outstanding, $1,000 par value, 17 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.
Common stock: 69,000 shares outstanding, selling for $61 per share; the beta is 1.11.
Market: 8.5 percent market risk premium and 5.5 percent risk-free rate.

Required:
Calculate the WACC. 



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  • CreatedSeptember 19, 2013
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