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What weight should use for preferred stock

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Point 1: FarCry Industries, a maker of telecommunications equipment, has 3 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10,000 bonds. Suppose the common shares sell for $28 per share, the preferred shares sell for $15.00 per share, and the bonds sell for 98 percent of par.

Question 1: What weight should you use for preferred stock in the computation of FarCry's WACC?

Reference no: EM132506807

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