Question
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 |
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| Preferred Stock | 5,000 |
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| Common stock (par + PIC) | 50,000 |
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| Retained earnings | 30,000 |
Net fixed assets | 45,000 | Total common equity | 80,000 |
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Total assets | 140,000 | Total liabilities & equity | 140,000 |
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