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Equity in the computation of farcry wacc

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Fairyland Inc. has 4 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 200 thousand bonds. The common shares are selling for $25 per share, the preferred share are selling for $10 per share, and the bonds are selling for 95 percent of their $1,000 par. (See P10-3 for formula to calculate weights).

A. What would be the weight used for equity in the computation of FarCry's WACC?

B. What weight should you use for debt in the computation of Fairyland 's WACC?

C. What weight should you use for preferred stock in the computation of Fairyland 's WACC?

Reference no: EM132403322

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