WhackAmOle has 4 million shares of common stock outstanding, 3.0 million shares of preferred stock outstanding, and 95,000 bonds. Assume the common shares are selling for $63 per share, the preferred shares are selling for $52.00 per share, and the bonds are selling for 103 percent of par.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 55E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

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WhackAmOle has 4 million shares of common stock outstanding, 3.0 million shares of preferred stock outstanding, and 95,000 bonds. Assume the common shares are selling for $63 per share, the preferred shares are selling for $52.00 per share, and the bonds are selling for 103 percent of par.

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

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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