Preferred stock in the computation of FarCry WACC

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Reference no: EM131931847

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 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?

Reference no: EM131931847

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