Fairyland Inc. has 4 million shares of common stock outstanding, 1 million shares of preferred stock...

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Fairyland Inc. has 4 million shares of common stock outstanding,1 million shares of preferred stock outstanding, and 200 thousandbonds. The common shares are selling for $25 per share, thepreferred share are selling for $10 per share, and the bonds areselling for 95 percent of their $1,000 par. (See P10-3 for formulato calculate weights).
A. What would be the weight used for equity in the computationof FarCry’s WACC?
B. What weight should you use for debt in the computation ofFairyland ‘s WACC?
C. What weight should you use for preferred stock in thecomputation of Fairyland ‘s WACC?

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No of sharescommon stock 4000000 Price per share 25 Value of Equity no of shares price per share 400000025 100000000 No of bonds 200000 Par value 1000 quoted price is 95 See Answer

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Fairyland Inc. has 4 million shares of common stock outstanding,1 million shares of preferred stock outstanding, and 200 thousandbonds. The common shares are selling for $25 per share, thepreferred share are selling for $10 per share, and the bonds areselling for 95 percent of their $1,000 par. (See P10-3 for formulato calculate weights).A. What would be the weight used for equity in the computationof FarCry’s WACC?B. What weight should you use for debt in the computation ofFairyland ‘s WACC?C. What weight should you use for preferred stock in thecomputation of Fairyland ‘s WACC?