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Weight of Debt

FarCry Industries, a maker of telecommunications equipment, has 3 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10,000 bonds. Suppose the common shares are selling for $29 per share, the preferred shares are selling for $15.50 per share, and the bonds are selling for 98 percent of par.

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

Weight used %

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Financial Management, Finance

Category:- Financial Management
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