What weight should you use preferred stock in computation

Assignment Help Financial Management

Reference no: EM13928247

OMG Inc. has 5 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 6,000 bonds. Suppose the common shares sell for $18 per share, the preferred shares sell for $17 per share, and the bonds sell for 108 percent of par.

What weight should you use for preferred stock in the computation of OMG’s WACC? (Round your answer to 2 decimal places.)

Weight used %

Reference no: EM13928247

Questions Cloud

What is the date on the balance sheet : 1. What is the date on the balance sheet? 2. Are there large discrepancies in balances between the prior year and the current year? 3. Did total assets increase over the prior year?

What factors account for apparent discrepancy in performance : The CEO has asked you to prepare a report on the situation. What factors (both within and outside of the firm) might account for this apparent discrepancy in performance?

Shares of stock outstanding selling-future dividends : Johnny Cake Ltd. has 8 million shares of stock outstanding selling at $20 per share and an issue of $40 million in 8 percent annual coupon bonds with a maturity of 16 years, selling at 90.5 percent of par. Assume Johnny Cake’s weighted-average tax ra..

What recent developments in world trade have made : According to Ferry, what recent developments in world trade have made it urgent for France to have colonies - what arguments against imperialism have been raised by Ferry's critics? How does he counter them?

What weight should you use preferred stock in computation : OMG Inc. has 5 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 6,000 bonds. Suppose the common shares sell for $18 per share, the preferred shares sell for $17 per share, and the bonds sell for 108 per..

Firm can pay for project and still earn required return : A firm is considering a project that will generate perpetual after-tax cash flows of $18,000 per year beginning next year. The project has the same risk as the firm’s overall operations and must be financed externally. What is the most the firm can p..

Create a replacement chain for alternative a : Create a replacement chain for Alternative A. Assume that the cost of replacing A will be $30,000 and that the replacement project will generate cash flows of $10,500 for years 5 through 8.

The largest observation in this dataset : In a hypothesis testing, if the p-value is less than the significance level α, we do not have sufficient evidence to reject the null hypothesis. Refer to the following frequency distribution for Questions 2, 3, 4, and 5. Show all work. Just the an..

Overlapping of incident and reflected waves : When incident and reflected waves overlap, interference may be (leading to a large wave motion) or (leading to a smaller wave motion).

User Account

All Pages