Debt-common stock and market

Assignment Help Financial Management

Reference no: EM131079364

You are given the following information for Huntington Power Co. Assume the company’s tax rate is 38 percent.

Debt: 7,000 6.8 percent coupon bonds outstanding, $1,000 par value, 30 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.

Common stock: 400,000 shares outstanding, selling for $58 per share; the beta is 1.14.

Market: 7 percent market risk premium and 4.80 percent risk-free rate.

What is the company’s WACC? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

Reference no: EM131079364

Questions Cloud

Describing the key differences between the two cultures : Consider as many of the components of the communication process and concepts as possible. Rely on your college-level writing and critical thinking skills to clearly communicate your ideas.

Calculate the percentage changes in return on equity : RAK, Inc., has no debt outstanding and a total market value of $250,000. Earnings before interest and taxes, EBIT, are projected to be $40,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 20 percen..

Question regarding the firm performance : Identify and explain some of the problems that can be encountered when trying to compare your firm's performance to that of a peer group.

Impression that satisfied workers : Your supervisor has the impression that satisfied workers are productive workers and has asked you to check this out. Based on this request discuss recommendations you would make to your supervisor.

Debt-common stock and market : You are given the following information for Huntington Power Co. Assume the company’s tax rate is 38 percent. Debt: 7,000 6.8 percent coupon bonds outstanding, $1,000 par value, 30 years to maturity, selling for 104 percent of par; the bonds make sem..

Funding of independent political broadcasts : Matrix Corporation provides the funds to make Over the Top, a film that is critical of Nathalie, who is a presidential candidate. According to a decision of the United States Supreme Court, corporate funding of independent political broadcasts

Have your ethical beliefs undergone any major changes : Have your ethical beliefs undergone any major changes?

How to stop illegal immigration into the country : There is a debate in America about how to stop illegal immigration into the country. Many people think that the United States should build a wall on the border with Mexico to prevent illegals from coming into the U.S.

What will be its optimal cash replenishment level : Watkins Resources faces a smooth annual demand for cash of $1.67 million, incurs transaction costs of $68 every time the firm sells marketable securities, and can earn 3.0 percent on its marketable securities. What will be its optimal cash replenishm..

User Account

All Pages