Given the following information for Huntington Electric Co., *Debt: 6,000 of 8 percent coupon bonds outstanding, $1,000

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

Given the following information for Huntington Electric Co., *Debt: 6,000 of 8 percent coupon bonds outstanding, $1,000

Post by answerhappygod »

Given the following information for Huntington Electric Co.,
*Debt: 6,000 of 8 percent coupon bonds outstanding, $1,000 par
value, 10 years to maturity, selling for 108 percent of par; the
bonds make annual payments.
*Preferred stock: 8000 shares of 7.2% preferred stock dividend
rate selling at $90 per share.
*Common stock: 500,000 shares outstanding, selling for $70 per
share; the beta is 1.12.
*Market data: 10 percent market rate of return and 5 percent
risk-free rate, and the corporate tax rate of 30%.
What is the before tax rate of this company?
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Post Reply