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Find the Weighted Average cost of Capital

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Reference no: EM132955129

Question - Given the following information for Huntington Power Co. find the Weighted Average cost of Capital (WACC). Assume the company's tax rate is 35 percent.

Debt: 4,000 5 percent coupon bonds outstanding, $1000 par value, 25 years to maturity, selling for 106 percent of par; the bonds make semiannual payments.

Common Stock: 175,000 shares outstanding, selling for $68 per share; the beta is 1.20

Market: 6 percent market risk premium and 4 percent risk-free rate.

Reference no: EM132955129

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