Question
In: Finance
suppose cooperation A has a book face debt value of $13m trading at 82% of face...
suppose cooperation A has a book face debt value of $13m trading at 82% of face value. It also has book equity of 17 million and 1.07 million shares of common stock trading at $26 per share. what is the weight for common equity that cooperation A should use in calculating its WACC?
Solutions
Expert Solution
Total market value of:
Debt=(13*82%)=$10.66 million
Equity=(1.07*26)=$27.82 million
Total market value=(10.66+27.82)=$38.48 million
Hence weight of equity=27.82/38.48
=0.723(or 72.3% approx)
jeff jeffy answered 2 years agoRelated Solutions
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