Huntington Power Co. has issued following three securities as its long-term source of capital. Calculate the weights of each source of capital (kd, kp, ke). Debt: 2,500 bonds outstanding, current market price of the bond is $1,080. Preferred Stock: 3,000 shares outstanding, selling for $98. Common Stock: 60,000 shares outstanding, selling for $55 per share. a. 42.90%; 4.67%; 52.43% b. 45.63%; 1.72%; 59.67% c. 42.90%; 4.67%; 55.71% d. 59.67%; 5.08%; 35.24% e. 45.63%; 1.72%; 52.65% f. 42.90%; 2.23%; 52.14%
Huntington Power Co. has issued following three securities as its long-term source of capital. Calculate the weights of each source of capital (kd, kp, ke). Debt: 2,500 bonds outstanding, current market price of the bond is $1,080. Preferred Stock: 3,000 shares outstanding, selling for $98. Common Stock: 60,000 shares outstanding, selling for $55 per share. a. 42.90%; 4.67%; 52.43% b. 45.63%; 1.72%; 59.67% c. 42.90%; 4.67%; 55.71% d. 59.67%; 5.08%; 35.24% e. 45.63%; 1.72%; 52.65% f. 42.90%; 2.23%; 52.14%
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
Problem 1PS
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Huntington Power Co. has issued following three securities as its long-term source of capital. Calculate the weights of each source of capital (kd, kp, ke).
Debt: 2,500 bonds outstanding, current market price of the bond is $1,080.
Common Stock: 60,000 shares outstanding, selling for $55 per share.
| a. |
42.90%; 4.67%; 52.43% |
|
| b. |
45.63%; 1.72%; 59.67% |
|
| c. |
42.90%; 4.67%; 55.71% |
|
| d. |
59.67%; 5.08%; 35.24% |
|
| e. |
45.63%; 1.72%; 52.65% |
|
| f. |
42.90%; 2.23%; 52.14% |
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