Assignment:
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Determine Weights for the Weighted Average Cost of Capitol
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Calculate Book Valu vs Mkt Valu weights:
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BS or Book Valu
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Wt
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Shares
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Mkt Price
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Sh x Price
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Mkt Value
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Wt
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Debt
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$ 150,000,000
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150000
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$ 1,075
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$ 161,250,000
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Preferred
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$ 45,000,000
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1500000
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$ 40
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Common Stk
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$ 180,000,000
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4500000
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$ 45.57
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Total
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$ 375,000,000
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Question 1 Calculate the Wts of Debt, Preferred, and Common Stk for Book Value & Market Value.
Question 2 Which set of weights will you recommend to use (Book or Market Value) and why?
Question 3 Present your recommendation to management in a power point.