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11. Fun Toys, Inc. has 500,000 shares of common stock outstanding, 150,000 shares of preferred stock outstanding, and 8,000 bonds. If the common shares are

11. Fun Toys, Inc. has 500,000 shares of common stock outstanding, 150,000 shares of preferred stock outstanding, and 8,000 bonds. If the common shares are selling for $32.50 per share, the preferred shares are selling for $45 per share, and the bonds are selling for 104 percent of par ($1000), what would be the common stock weight used in the calculation of the firms WACC?

A. more than 51.50 percent

B. more than 48.25 percent but less than 51.50 percent

C. more than 44.50 percent but less than 48.25 percent

D. more than 40.75 percent but less than 44.50 percent

E. less than 40.75 percent

12. A firm has 5.4 million shares of common stock outstanding, 1.5 million shares of preferred stock outstanding, and 75,000 bonds. If the common shares are selling for $18 per share, the preferred shares are selling for $12.50 per share, and the bonds are selling for 98.5 percent of par, what would be the weight used for debt in the computation of the firms WACC?

A. less than 30.75 percent

B. more than 30.75 percent but less than 33.00 percent

C. more than 33.00 percent but less than 36.25 percent

D. more than 36.25 percent but less than 39.50 percent

E. more than 39.50 percent

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