Back to Assignment Attempts: 1. The basic WACC equation The calculation of WACC

Question

Back to Assignment Attempts: 1. The basic WACC equation The calculation of WACC involves calculating the weighted average of the required rates of return on debt and equity Keep the Highest: 12 where the weights equal the percentage of each type of financing in the firm's overall capital structure. is the symbol that represents the cost of raising capital through retained eamings in the weighted average capital (WACC) equation. Raymond Co. has $1.1 million of debt, $1 million of preferred stock, and $3.3 million of common equity. What would be its weight on preferred stock? 0.19 0.21 0.15 O o.20

Explanation / Answer

The correct answer is rs. This is the symbol that represents the cost of raising capital through retained earnings in the weighted Average Capital equation.

The correct answer is 0.19

Note :

Value Weight (Respective Value / Total Value) Debt 1.1 Million 0.20 Preferred Stock 1 Million 0.19 Equity 3.3 Million 0.61 5.4

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