Q1 For the reason that the UCC offers special protection to HDCs, acquitted makers of notes or drawers of checks in fraudulent transactions frequently have no legal recourse. From a principled standpoint, how could you defend to the ‘losers' in such circumstances the provisions of the UCC that fail to protect them? Can you think of a method in which such problems could be handled more fairly or Finding the WACC: morally than they are under the UCC?
Q2 Information on Huntington Power Co. is shown below. Presume the company's tax rate is 34 percent. Debt: 6,000 8.5 percent coupon bonds outstanding, $1,000 par value 21 years to maturity, selling for 105 percent of par, the bonds make semi-annual payments. Common stock- 150,000 shares outstanding, selling for $60 per share, the beta is 1.11. Market: 9.5 percent market risk premium and 7.5 percent risk-free rate. Compute the WACC?