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JFG, Inc. has the following capital structure:1. 9.4 million shares of common stock priced at $28.12/share2....

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Finance


JFG, Inc. has the following capital structure:1. 9.4 millionshares of common stock priced at $28.12/share2. 3 million shares ofpreferred stock that pays a 6.7% dividend (par value = $100) and iscurrently priced at $101/share3. 200,000 outstanding bonds. Thebonds mature in 10 years, have a par (face) value of $1,000, a 7%annual coupon, and a yield to maturity of 8.25%.What is the MVweight of Debt JFG would use in their WACC calculation? ?Pleaseshow me the process. Thanks??

Answer & Explanation Solved by verified expert
4.4 Ratings (649 Votes)
Market Value of each capital Structure Market Value of Debt 183412000 200000 Bonds x 91706 per bond Market Value of Preferred Stock 303000000 3000000 shares x 101 per share Market Value of Equity 264328000 9400000 shares x 2812 per share Total    See Answer
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JFG, Inc. has the following capital structure:1. 9.4 millionshares of common stock priced at $28.12/share2. 3 million shares ofpreferred stock that pays a 6.7% dividend (par value = $100) and iscurrently priced at $101/share3. 200,000 outstanding bonds. Thebonds mature in 10 years, have a par (face) value of $1,000, a 7%annual coupon, and a yield to maturity of 8.25%.What is the MVweight of Debt JFG would use in their WACC calculation? ?Pleaseshow me the process. Thanks??

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