Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. The balance sheet for OUS Corp is shown below. The bonds are currently selling at 97.5% of par. There are 500 shares of preferred

2. The balance sheet for OUS Corp is shown below. The bonds are currently selling at 97.5% of par. There are 500 shares of preferred stock outstanding and it has a current market price of $11.20. There are 6,000 shares of common stock outstanding and the latest quote was $32.35. What is the best estimate for the weights to be used when calculating the WACC?

Balance Sheet as of 12/31/11

Cash

10,000

Accounts payable

20,000

Marketable securities

20,000

Notes payable

10,000

Accounts Receivable

25,000

Accruals

15,000

Inventory

40,000

Total current liabilities

45,000

Total Current Assets

95,000

Long term bonds

10,000

Preferred Stock

5,000

Common stock (par + PIC)

50,000

Retained earnings

30,000

Net fixed assets

45,000

Total common equity

80,000

Total assets

140,000

Total liabilities & equity

140,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance And Strategy

Authors: Belen Villalonga

1st Edition

1783504935, 978-1783504930

More Books

Students also viewed these Finance questions

Question

13-1 How does building new systems produce organizational change?

Answered: 1 week ago