Question
1) BetterPie Industries has 6 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 15,000 bonds. Assume the common shares
1) BetterPie Industries has 6 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 15,000 bonds. Assume the common shares are selling for $49 per share, the preferred shares are selling for $26.50 per share, and the bonds are selling for 99 percent of par. What would be the weights used in the calculation of BetterPies WACC? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
2) Suppose you sell a fixed asset for $113,000 when its book value is $133,000. If your companys marginal tax rate is 21 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? (Enter your answer as a whole number.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started