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MC algo 12-12 Capital Structure Weight Further From Center has 10,400 shares of common stock outstanding at a price of $38 pe

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Answer #1

The correct answer is 0.0217

Note:

Value of equity = 10400 * $ 38

Value of Debt = $ 1000* 94% *540

Value of Preferred Stock = 225 *$ 89

Value ( Number * Price) Weight (Respective/ Total)
Preferred Stock 20025 0.0217
Equity 395200 0.4283
Debt 507600 0.5501
Total Value 922825
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