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You are given the following information for Huntington Power Co. Assume the company's tax rate is 40 percent. Debt:5,000 7.8 percent coupon bonds outstanding, $1,000
You are given the following information for Huntington Power Co. Assume the company's tax rate is 40 percent.
- Debt:5,000 7.8 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 107 percent of par; the bonds make semiannual payments.
- Common stock: 500,000 shares outstanding, selling for $68 per share; the beta is 1.11.
- Market: 9 percent market risk premium and 5.8 percent risk-free rate.
What is the company's WACC?
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Entrepreneurial Finance
Authors: Philip J. Adelman; Alan M. Marks
6th edition
9780133099096, 133140512, 133099091, 978-0133140514
