Solar Shades has 6.4 million shares of common stock outstanding, 5.4 million sha

Question

Solar Shades has 6.4 million shares of common stock outstanding, 5.4 million shares of preferred stock outstanding, and 24 thousand bonds. If the common shares are selling for $29.50 per share, the preferred share are selling for $31.40 per share, and the bonds are selling for 104.86 percent of par, what would be the weight used for equity in the computation of Solar Shade's WACC?

54.13%

33.33%

49.23%

66.67%

Solar Shades has 6.4 million shares of common stock outstanding, 5.4 million shares of preferred stock outstanding, and 24 thousand bonds. If the common shares are selling for $29.50 per share, the preferred share are selling for $31.40 per share, and the bonds are selling for 104.86 percent of par, what would be the weight used for equity in the computation of Solar Shade's WACC?

Explanation / Answer

No. of shares    per share cost value Common Stock 6400000 29.5 188800000 Preferred Stock 5400000 31.4 169560000 Bonds 24000 1048.6 25166400 383526400 Weight used for Equity in WACC calculation = 188800000/383526400*100 = 49.23%

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.