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Calculate weighted average cost of capital

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Reference no: EM131874198

Question - Information on Huntington Power Co. is shown below. Assume the company's tax rate is 33 percent.

Debt: 5,500 5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.

Common stock: 110,000 shares outstanding, selling for $57 per share; the beta is 1.07.

Market: 7 percent market risk premium and 3.5 percent risk-free rate.

Calculate weighted average cost of capital?

Reference no: EM131874198

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