FarCry Industries, a maker of telecommunications equipment, has 5 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 20,000 bonds. Suppose the common shares sell for $27 per share, the preferred shares sell for $14.50 per share, and the bonds sell for 98 percent of par. What weight should you use for preferred stock in the computation of FarCry's WACC? (Round your answer to 2 decimal places.)
FarCry Industries, a maker of telecommunications equipment, has 5 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 20,000 bonds. Suppose the common shares sell for $27 per share, the preferred shares sell for $14.50 per share, and the bonds sell for 98 percent of par. What weight should you use for preferred stock in the computation of FarCry's WACC? (Round your answer to 2 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Subject:- finance
Transcribed Image Text:FarCry Industries, a maker of telecommunications equipment, has 5 million shares of common stock outstanding, 2 million shares of
preferred stock outstanding, and 20,000 bonds. Suppose the common shares sell for $27 per share, the preferred shares sell for
$14.50 per share, and the bonds sell for 98 percent of par.
What weight should you use for preferred stock in the computation of FarCry's WACC? (Round your answer to 2 decimal places.)
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