OMG Inc. has 7 million shares of common stock outstanding, 5 million shares of preferred stock outstanding, and 4,000 bonds.Suppose the common shares are selling for $28 per share, the preferred shares are selling for $27 per share, and the bonds areselling for 108 percent of par.What weight should you use for debt in the computation of OMG's WACC? (Round your answer to 2 decimal places.)Weight used< Prey12 of 15Next >

Given, Common stock outstanding = 7 million Preferred stock outstanding = 5 millin Number of bonds =…

Answered: OMG Inc. has 7 million shares of common…

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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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.)
Suppose Westerfield Co. has the following financial information: Debt: 900, 000 bonds outstanding with a face value of $1,000. The bonds currently trade at 85% of par and have 12 years to maturity. The coupon rate equals 7%, and the bonds make semiannual interest payments. Preferred stock: 600,000 shares of preferred stock outstanding; currently trading for $108 per share, paying a dividend of $9 annually. Common stock: 25,000,000 shares of common stock outstanding; currently trading for $185 per share. Beta equals 1.22. Market and firm information: The expected return on the market is 9%, the risk - free rate is 5%, and the tax rate is 21 %. Calculate the weight of debt in the capital structure. (Enter percentages as decimals and round to 4 decimals)
CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) Preferred stock Common stock ($10 par) Retained earnings Total debt and equity $10,000,000 2.000.000 10,000,000 4.000.000 $26.000,000 The bonds have a 6.6% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Select the correct answer. Oa. $6,900,480 Ob.$6,901,361 Oc$6,899,600 d. $6,903,121 Oe. $6,902,241
Carrie D's has 5.9 million shares of common stock outstanding, 2.9 million shares of preferred stock outstanding, and 19.00 thousand bonds. If the common shares are selling for $29.00 per share, the preferred share are selling for $28.90 per share, and the bonds are selling for 108.91 percent of par, what would be the weight used for common stock in the computation of Carrie D's WACC? 66.90% 33.33% 66.67% 62.08%
NFG investment company that has 4 million shares outstanding has total assets of $62 million and total liabilities of $12 million. If this investment company charges a load of 3.5%, how much would an investor have to pay to purchase one share? . (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
FarCry Industries, a maker of telecommunications equipment, has 2 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10,000 bonds. Suppose the common shares sell for $26 per share, the preferred shares sell for $14.00 per share, and the bonds sell for 97 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.)
Top Rope Productions has 3.00 million shares outstanding that currently trade at $11.66. The firm has $16.00 million of long-term debt, and $6.00 million in cash. What is a rough estimate for the firm's enterprise value? (Express answer in millions. For example, $1,000,000 would be 1.00) Submit Answer format: Currency: Round to: 2 decimal places.
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%
OMG Inc. has 4 million shares of common stock outstanding, 3 million shares of preferred stock outstanding, and 5 thousand bonds. If the common shares sell for $17 per share, the preferred shares sell for $126 per share, and the bonds sell for 117 percent of par ($1,000), what weight should you use for preferred stock in the computation of OMG's WACC?
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%
OMG Incorporated has 4 million shares of common stock outstanding, 3 million shares of preferred stock outstanding, and 5,000 bonds. Suppose the common shares sell for $18 per share, the preferred shares sell for $17 per share, and the bonds sell for 108 percent of par. What weight should you use for preferred stock in the computation of OMG's WACC? Note: Round your answer to 2 decimal places. Weight used %

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