Finding the WACC Given the following information for Huntington Power Co., find the WACC. Assume the company’s tax rate is 35 percent.
Debt: | 5,000 8 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: | 160,000 shares outstanding, selling for $57 per share; the beta is 1.10. |
Market: | 7 percent market risk premium and 6 percent risk-free rate. |
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