Information on Huntington Power Co. is shown below
January 8th, 2018
Information on Huntington Power Co. is shown below. Assume the company’s tax rate is 35 percent.Debt: 3,000 7.5 percent coupon bonds outstanding, $1,000 par value, 17 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.Common stock: 69,000 shares outstanding, selling for $61 per share; the beta is 1.11.Market: 8.5 percent market risk premium and 5.5 percent risk-free rate.Required:Calculate the WACC.