What are weights of each of capital components

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1. A company currently has 2000 bonds issued with a par value of $1000 and a price of $750, $500,000 of preferred stock issued, and 100,000 shares of common stock with a price of $60 and a par value of a dollar. What are the weights of each of its capital components?

2. A company currently has $2 million of debt issued and $8 million of common stock. The yield to maturity on its debt is 6% and its current stock price is $60. It expects to pay a dividend of $4 next year and has constant growth in its dividends of 5%. If the company pays taxes at a rate of 40%, what is its WACC?

Reference no: EM132053539

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