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MV Corporation has debt with market value of $ 99 ​million, common equity with a book...

MV Corporation has debt with market value of $ 99 ​million, common equity with a book value of $ 104 ​million, and preferred stock worth $ 18 million outstanding. Its common equity trades at $ 55 per​ share, and the firm has 6.3 million shares outstanding. What weights should MV Corporation use in its​ WACC?

The debt weight for the WACC calculation is %. ​(Round to two decimal​ places.)

The preferred stock weight for the WACC calculation is %. ​(Round to two decimal​ places.)

The common equity weight for the WACC calculation is %. (Round to two decimal​ places.)

Solutions

Expert Solution

Note-

Weight of debt = Market value of debt /Total market value of capital

Weight of equity = Market value of equity /Total market value of capital

Weight of preferred stock = Market value of Preferred stock / Total market value of capital

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jeff jeffy answered 1 year ago
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