Finding the WACC Given the following information for Huntington Power Co., find the WACC. Assume the company’s tax rate is 35 percent.

Debt: 4,000 7 percent coupon bonds outstanding, $1,000 par value, 20 years to matu rity, selling for 103 percent of par; the bonds make semiannual payments.

Common stock: 90,000 shares outstanding, selling for $57 per share; the beta is 1.10.

Market: 8 percent market risk premium and 6 percent risk-free rate. LO.1