Quiz: Q13 Time Remaining: 00:50:42 Submit Quiz This Question: 1 pt 40f 4 (2 comp
ID: 2784304 • Letter: Q
Question
Quiz: Q13 Time Remaining: 00:50:42 Submit Quiz This Question: 1 pt 40f 4 (2 complete) This Quiz: 10 pts possible MV Corporation has debt with market value of $104 million, common equity with a book value of $104 million, and preferred stock worth $18 milion outstanding. Its common equity trades at $55 per share, and the firm has 6.4 milion shares outstanding. What weights should MV Corporation use in its WACC? The debt weight for the WACC calculation is %. (Round to two decimal places ) The p eemed stock weight for the WACC calculation is %. (Round to two dec mal places The common equity weight for the WACC calculation is 1% (Round to two decimal places.) Enter your answer in each of the answer boxes.Explanation / Answer
Value of debt $104 millions
Value of preference shares $18 millions
Market value of equity $352 millions (6.4 million shares * $55)
Total market value of firm $474 millions($104 + $18 + $352)
Debt = $104 / $474 = 21.94%
Preference shares = $18 / $474 = 3.80%
Equity = $352 / $474
= 74.26%.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.