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What is the company wacc for huntington power co

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Reference no: EM132797044

You are given the following information for Huntington Power Co. Assume the company's tax rate is 40 percent.

  1. Debt: 5,000 7.8 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 107 percent of par; the bonds make semiannual payments.
  2. Common stock: 500,000 shares outstanding, selling for $68 per share; the beta is 1.11.
  3. Market: 9 percent market risk premium and 5.8 percent risk-free rate.

Problem 1: What is the company's WACC?

Option 1: 8.56%

Option 2: 12.61%

Option 3: 9.24%

Option 4: 14.23%

Reference no: EM132797044

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