1 Denver Interiors has 62,000 shares of common stock outstanding at a price per share of $44 The firm also has 21,000 shares of preferred stock outstanding at a price per share of $53 There are 1,700 outstanding bonds with a face value of $1,100 and a price quote of 99 6 What is the capital structure weight of the preferred stock 17 82 percent 20 04 percent 20 33 percent 19 51 percent 2 Meiston Press has a debt equity ratio of 1 30 The pre tax cost of debt is 8 75 percent and the cost of equity is 13 6 percent What is the firms weighted average cost of capital (WACC) if the tax rate is 34 percent 11 21 percent 9 96 percent 10 33 percent 9 18 percent 3 Preston Industries has a WACC of 11 88 percent The capital structure consists of 60 8 percent equity and 35 8 percent debt The aftertax cost of debt is 6 3 percent and the cost of equity is 15 00 percent What is the cost of preferred stock 14 84 percent 18 94 percent 17 04 percent 17 74 percent 4 How can a firm determine its cost of debt if it currently has no debt outstanding The firm can use its cost of equity multiplied by (1 Tax rate) The firm should use the yield to maturity on currently outstanding bonds that have a bond rating similar to the bonds the firm plans to issue The firm should use the initial yield to maturity on its last outstanding bond issue The cost of debt should be set equal to the current risk free rate 5 Kelsey Foods has a company weighted average cost of capital (WACC) of 12 4 percent Based on this WACC, the firm assigns a required return of 14 5 percent to risky projects, 12 4 percent to projects related to the expansion of the firms current operations, and a required return of 11 percent to new, low risk projects Which one of the following terms best describes this firms policy of assigning required returns pure play approach basic approach tax approach subjective approach Please answer all questions, thank you

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1. Denver Interiors has 62,000 shares of common stock outstanding at a price per share of $44. The firm also has 21,000 shares of preferred

Denver Interiors has 62,000 shares of common stock outstanding at a price per share of $44. The firm also has 21,000 shares of preferred stock outstanding at a price per share of $53. There are 1,700 outstanding bonds with a face value of $1,100 and a price quote of 99.6. What is the capital structure weight of the preferred stock?

17.82 percent

20.04 percent

20.33 percent

19.51 percent

Meiston Press has a debt-equity ratio of 1.30. The pre-tax cost of debt is 8.75 percent and the cost of equity is 13.6 percent. What is the firms weighted average cost of capital (WACC) if the tax rate is 34 percent?

11.21 percent

9.96 percent

10.33 percent

9.18 percent

Preston Industries has a WACC of 11.88 percent. The capital structure consists of 60.8 percent equity and 35.8 percent debt. The aftertax cost of debt is 6.3 percent and the cost of equity is 15.00 percent. What is the cost of preferred stock?

14.84 percent

18.94 percent

17.04 percent

17.74 percent

How can a firm determine its cost of debt if it currently has no debt outstanding?

The firm can use its cost of equity multiplied by (1 Tax rate).

The firm should use the yield-to-maturity on currently outstanding bonds that have a bond rating similar to the bonds the firm plans to issue.

The firm should use the initial yield-to-maturity on its last outstanding bond issue.

The cost of debt should be set equal to the current risk-free rate.

Kelsey Foods has a company weighted average cost of capital (WACC) of 12.4 percent. Based on this WACC, the firm assigns a required return of 14.5 percent to risky projects, 12.4 percent to projects related to the expansion of the firms current operations, and a required return of 11 percent to new, low-risk projects. Which one of the following terms best describes this firms policy of assigning required returns?

pure play approach

basic approach

tax approach

subjective approach

Please answer all questions, thank you