BetterPie Industries has 6 million shares of common stock outstanding, 4 million
ID: 2798834 • Letter: B
Question
BetterPie Industries has 6 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 15,000 bonds. Assume the common shares are selling for $49 per share, the preferred shares are selling for $26.50 per share, and the bonds are selling for 99 percent of par. What would be the weights used in the calculation of BetterPie’s WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Equity weight % Preferred stock weight % Debt weight % BetterPie Industries has 6 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 15,000 bonds. Assume the common shares are selling for $49 per share, the preferred shares are selling for $26.50 per share, and the bonds are selling for 99 percent of par. What would be the weights used in the calculation of BetterPie’s WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Equity weight % Preferred stock weight % Debt weight % BetterPie Industries has 6 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 15,000 bonds. Assume the common shares are selling for $49 per share, the preferred shares are selling for $26.50 per share, and the bonds are selling for 99 percent of par. What would be the weights used in the calculation of BetterPie’s WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Equity weight % Preferred stock weight % Debt weight %Explanation / Answer
Total value of common stock=(6*49)=$294million
Total value of preferred stock=(4*26.5)=$106million
Total value of bonds=15000*(1000*99%)=$14.85million
Total=$414.85million
Hence weight of :
Equity=(294/414.85)=70.87%
Preferred stock=(106/414.85)=25.55%
Bonds=(14.85/414.85)=3.58%(Approx).
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