You are given the following information for Huntington Power Co. Assume the company’s tax rate is...

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Finance

You are given the following information for Huntington Power Co.Assume the company’s tax rate is 23 percent.
Debt: 24,000 5.2 percent coupon bonds outstanding, $2,000 parvalue, 23 years to maturity, selling for 107 percent of par; thebonds make semiannual payments.
Common stock: 440,000 shares outstanding, selling for $70 pershare; the beta is .95.
Market: 6 percent market risk premium and 3.5 percent risk-freerate.
What is the company's WACC? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2decimal places, e.g., 32.16.)

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4.5 Ratings (985 Votes)

MV of equityPrice of equitynumber of shares outstanding MV of equity70440000 30800000 MV of BondPar valuebonds outstandingage of par MV of Bond200024000107 51360000 See Answer

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You are given the following information for Huntington Power Co.Assume the company’s tax rate is 23 percent.Debt: 24,000 5.2 percent coupon bonds outstanding, $2,000 parvalue, 23 years to maturity, selling for 107 percent of par; thebonds make semiannual payments.Common stock: 440,000 shares outstanding, selling for $70 pershare; the beta is .95.Market: 6 percent market risk premium and 3.5 percent risk-freerate.What is the company's WACC? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2decimal places, e.g., 32.16.)