The Common's CFO is in the process of determining the firm's WACC and needs to figure out the weights of the various typ

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The Common S Cfo Is In The Process Of Determining The Firm S Wacc And Needs To Figure Out The Weights Of The Various Typ 1 (50.11 KiB) Viewed 9 times

The Common's CFO is in the process of determining the firm's WACC and needs to figure out the weights of the various types of capital sources. Accordingly, he starts by collecting information from the balance sheet and the capital markets, and makes up the Table shown below: Component Balance Sheet Value Number outstanding Current Market Price Market Value $1,075 $3,762,500 $90 $990,000 $22.00 $8,800,000 Debt Preferred stock Common stock $3,000,000 3,500 $1,000,000 11,000 $7,000,000 400,000 Which of the following statements is correct? The weight for common stock is 64.93%. The weight of the debt that should be used is 27.76%. All of the answers are correct. O The weight for preferred stock is 7.30%.