Capital structure weight of the preferred stock

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Reference no: EM132061096

1. Take It All Away has a cost of equity of 10.78 percent, a pretax cost of debt of 5.43 percent, and a tax rate of 40 percent. The company's capital structure consists of 76 percent debt on a book value basis, but debt is 36 percent of the company's value on a market value basis. What is the company's WACC?

8.07%

10.68%

8.85%

9.44%

6.41%

2. Further From Center has 12,300 shares of common stock outstanding at a price of $57 per share. It also has 320 shares of preferred stock outstanding at a price of $89 per share. There are 390 bonds outstanding that have a coupon rate of 7.6 percent paid semiannually. The bonds mature in 38 years, have a face value of $2,000, and sell at 112.5 percent of par. What is the capital structure weight of the preferred stock?

.0944

.0630

.5460

.0177

.4363

Reference no: EM132061096

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