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Find the weight of common stock that would use in wacc

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Reference no: EM132957201

Problem 1: An investment promises to pay $4.2 every year forever. If you pay $28 for the investment, what interest rate will you earn?

Problem 2: Magma has 1100 bonds outstanding with a face value of $1000 that are selling for par ($1000). The common stock has a value of $700,000 in the balance sheet, a stock price of $50 per share and 30,000 shares outstanding. Find the weight of the common stock that you would use in the weighted average cost of capital (WACC).

Option 1: .39

Option 2: .67

Option 3: .58

Option 4: .61

Reference no: EM132957201

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