Reference no: EM133120138
Given the following information for Huntington Power Co. Assume the company's tax rate is 35%.
Debt: 4,000 bonds outstanding, 7% coupon, $1000 par value, 20 years to maturity, selling for 103% of par; the bonds make semiannual payment
Common stock: 90,000 shares outstanding, selling for $57 per share; the beta is 1.10.
Preferred stock: 13,000 shares of preferred stock outstanding, selling for $104 per share, $6 annual dividend.
Market: 8% market risk premium and 6% risk-free rate
1. What is Huntington Power's cost of debt (before tax)?
2. What is Huntington Power's cost of common stock?
3. What is Huntington Power's WACC?
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