Company fly high has 3 million shares of common stock outstanding at a book value of $2.5 per share. The stock trades for $3.50 per share. It also has $2 million in face value debt that trades at 110% of par. What is its D/E ratio for WACC purposes? a. 20.95% b. 25.35% c. 17.32% d. 21.50%

Company fly high has 3 million shares of common stock outstanding at a book value of $2.5 per share. The stock trades for $3.50 per share. It also has $2 million in face value debt that trades at 110% of par. What is its D/E ratio for WACC purposes? a. 20.95% b. 25.35% c. 17.32% d. 21.50%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 3P: Winston Watch’s stock price is $75 per share. Winston has $10 billion in total assets. Its balance...

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Question

Abc

Company fly high has 3 million shares of common
stock outstanding at a book value of $2.5 per share.
The stock trades for $3.50 per share. It also has $2
million in face value debt that trades at 110% of par.
What is its D/E ratio for WACC purposes?
a. 20.95%
b. 25.35%
c. 17.32%
d. 21.50%

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