WhackAmOle has 4 million shares of common stock outstanding, 3.0 million shares

Question

WhackAmOle has 4 million shares of common stock outstanding, 3.0 million shares of preferred stock outstanding, and 95,000 bonds. Assume the common shares are selling for $62 per share, the preferred shares are selling for $51.00 per share, and the bonds are selling for 105 percent of par. Whet would be the weights used in the calculation of WhackAmOle?s WACC? (Do not round intermediate calculations end round your answers to 2 decimal places.) Equity weight % Preferred stock weight % Debt weight %

Explanation / Answer

a> WACC =0.37*15+0.17*12+0.46*10*(1-0.30)=10.81%

b>Total Value of the Capital=4*62+3*51+0.095*105=410.975m

Equity Weight=4*62/410.975=0.603

Preferred Stock Wweight-=3*51/410.975=0.372

Debt Weight=0.095*105/410.975=0.024

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