MV Corporation has debt with market value of $105 million, common equity with a

Question

MV Corporation has debt with market value of $105 million, common equity with a book value of $103 million, and preferred stock worth $19 million outstanding. Its common equity trades at $50 per share, and the firm has 6.2 million shares outstanding. What weights should MV Corporation use in its WACC? The debt weight for the WACC calculation is | |96. (Round to two decimal places.) The preferred stock weight for the WACC calculation is | % (Round to two decimal places.) The common equity weight for the WACC calculation is 96 Round to two decimal places.

Explanation / Answer

The correct answer is :

24.19%

4.38%

71.43%

Note :

Value Weight(Respective Value / Total Value) Weight % Equity(6.2 Million * $50 Per Share) 310,000,000 0.7143 71.43 Preferred Stock 19,000,000 0.0438 4.38 Debt 105,000,000 0.2419 24.19 434,000,000

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