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 25 percent. Debt: 22,000 5 percentcoupon bonds outstanding, $2,000 par value, 25 years to maturity,selling for 107 percent of par; the bonds make semiannual payments.Common stock: 430,000 shares outstanding, selling for $68 pershare; the beta is .93. Market: 7 percent market risk premium and3.3 percent risk-free rate. What is the company's WACC? (Do notround intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

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4.1 Ratings (831 Votes)

Debt Number of bonds outstanding 22000 Face Value 2000 Current Price 107 2000 Current Price 2140 Market Value of Debt 22000 2140 Market Value of Debt 47080000 Annual Coupon Rate 500 Semiannual Coupon Rate 500 Semiannual Coupon 250 2000 See Answer

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You are given the following information for Huntington Power Co.Assume the company’s tax rate is 25 percent. Debt: 22,000 5 percentcoupon bonds outstanding, $2,000 par value, 25 years to maturity,selling for 107 percent of par; the bonds make semiannual payments.Common stock: 430,000 shares outstanding, selling for $68 pershare; the beta is .93. Market: 7 percent market risk premium and3.3 percent risk-free rate. What is the company's WACC? (Do notround intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)