Question
You are given the following information for Huntington Power Co. Assume the companys tax rate is 40 percent. Debt: 7,000 7.4 percent coupon bonds outstanding,
| You are given the following information for Huntington Power Co. Assume the companys tax rate is 40 percent. |
| Debt: | 7,000 7.4 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 103 percent of par; the bonds make semiannual payments. |
| Common stock: | 460,000 shares outstanding, selling for $64 per share; the beta is 1.07. |
| Market: | 7 percent market risk premium and 5.4 percent risk-free rate. |
| What is the company's WACC? |
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
