1) FarCry Industries, a maker of telecommunications equipment, has 5 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 20,000 bonds. Suppose the common shares are selling for $25 per share, the preferred shares are selling for $13.50 per share, and the bonds are selling for 97 percent of par.
What would be the weight used for equity in the computation of FarCry’s WACC? (Round your answer to 2 decimal places.)
2) You own $11,153 of Olympic Steel stock that has a beta of 1.98. You also own $20,545 of Rent-a-Center (beta = 1.58) and $27,002 of Lincoln Educational (beta = 0.73).
What is the beta of your portfolio? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)