Given the following for Huntington Power Co., find the WACC. Assume the company's tax rate is 21 percent. Debt: 20,000 5.1 percent coupon bonds outstanding, $2000 par value, 20 years to maturity, selling for 105 percent of par, the bonds make semiannual payments. Common stock: 900,000 shares outstanding selling for $77 per share; the beta is 95. Market: 7 percent market risk premium and 3.5 percent risk-free rate.

Given the following for Huntington Power Co., find the WACC. Assume the company's tax rate is 21 percent. Debt: 20,000 5.1 percent coupon bonds outstanding, $2000 par value, 20 years to maturity, selling for 105 percent of par, the bonds make semiannual payments. Common stock: 900,000 shares outstanding selling for $77 per share; the beta is 95. Market: 7 percent market risk premium and 3.5 percent risk-free rate.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 23P

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