fin 305 ch 11 q 13 BetterPie Industries has 6 million shares of common stock out

Question

fin 305 ch 11 q 13

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 $47 per share, the preferred shares are selling for $24.50 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 and round your answers to 2 decimal places.)

What would be the weights used in the calculation of BetterPie’s WACC? (Do not round intermediate calculations and round your answers to 2 decimal places.)

Explanation / Answer

let par value of bond be =$1000

current price= 1000 *99% = 990

Value weight Equity 282,000,000    [6,000,000*47] .71   [282000000/394850000] Preferred stock 98,000,000      [4,000,000 * 24.5] .25 [98000000/394850000] Debt 14,850,000      [15000 * 990 ] .04 [14850000/394850000] 394,850,000

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

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