MV Corporation has debt with market value of $100 million, common equity with a book value of $100 million, and preferred stock worth $20 million outstanding. Its common equity trades at $50 per share, and the firm has 6.0 million shares outstanding. What weights should MV Corporation use in its WACC? The debt weight for the WACC calculation is %. (Round to two decimal places.) The preferred stock weight for the WACC calculation is decimal places.) %. (Round to two The common equity weight for the WACC calculation is decimal places.) %. (Round to two

MV Corporation has debt with market value of $100 million, common equity with a book value of $100 million, and preferred stock worth $20 million outstanding. Its common equity trades at $50 per share, and the firm has 6.0 million shares outstanding. What weights should MV Corporation use in its WACC? The debt weight for the WACC calculation is %. (Round to two decimal places.) The preferred stock weight for the WACC calculation is decimal places.) %. (Round to two The common equity weight for the WACC calculation is decimal places.) %. (Round to two

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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A firm has 750 bonds outstanding that are selling for $989 each, 2,500 shares of preferred stock with a market price of $47 per share, and 30,000 shares of common stock valued at $56 per share. What weight should be assigned to the common stock when computing the firm's weighted average cost of capital? a. 54.00% b. 55.45% c. 66.16% d. 62.08% e. 47.11%
Mitchell Co. has $1.1 million of debt, $2 million of preferred stock, and $1.8 million of common equity. What would be its weight on preferred stock?
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 are selling for $25 per share, the preferred shares are selling for $13.50 per share, and the bonds are selling for 97 percent of par.What would be the weight used for equity in the computation of FarCry’s WACC? (Round your answer to 2 decimal places.)
Globex Corp.'s debt has a market value of $147,267 million, and Globex Corp. has no preferred stock. If Globex Corp. has 225 million shares of common stock outstanding, what is Globex Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)
FarCry Industries, a maker of telecommunications equipment, has 2 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10,0000 bonds. Suppose the common shares are selling for $27 per share, the preferred shares are selling for $14.50 per share, and the bonds are selling for 98 percent of par. What would be the weight used for equity in the computation of FarCry's WACC? (Round your answer to 2 decimal places. Write your answer in percentage.)
MV Corporation has debt with market value of $97 million, common equity with a book value of $105 million, and preferred stock worth $23 million outstanding. Its common equity trades at $46 per share, and the firm has 6.1 million shares outstanding. What weights should MV Corporation use in its WACC? The debt weight for the WACC calculation is %. (Round to two decimal places.)
2. Book Co. has 1.5 million shares of common equity with a par (book) value of $1.15, retained earnings of $29.9 million, and its shares have a market value of $50.88 per share. It also has debt with a par value of $18.2 million that is trading at 102% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? **round to two decimal places**
CO A has cash flows of $0.76 per share, earnings of $1.25 per share and 115,000 shares outstanding. Co B. is a comparable public company with a price of $60 per share, cash flows of $2.14 per share, and 510,000 shares outstanding. If Co Bis a sufficiently comparable company, what do you estimate Co B. price per share to be? Assume: Risk free rate 4% Market risk premium 7% Cost of debt 4%, beta of debt is 0. Tax rate 23%
Flimsy Safe Room’s, Inc. has total assets of $1,000,000. The firm has $100,000 in inventory. It has $300,000 in long-term debt and $400,000 in current assets. The common stockholders’ equity is $400,000. The firm does not have any preferred stock outstanding. What is Flimsy Safe Room's total debt ratio defined as total liabilities to total assets? Question 1 options: A) 0.6 = 60% B) 0.4 = 40% C) 0.5 = 50% D) 0.3 = 30%
Assume JUP has debt with a book value of $22 million, trading at 120% of par value. The firm has book equity of $25 million, and 2 million shares trading at $18 per share. What weights should JUP use in calculating its WACC? ..... A. 33.85% for debt, 66.15% for equity B. 29.62% for debt, 70.38% for equity C. 42.31% for debt, 57.69% for equity D. 38.08% for debt, 61.92% for equity

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