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Florida Groves has a $250,000 face value bond issue outstanding that is selling at 108 percent of face value. The firm also has 5,000 shares
Florida Groves has a $250,000 face value bond issue outstanding that is selling at 108 percent of face value. The firm also has 5,000 shares of preferred stock valued at $38 a share and 45,000 shares of common stock valued at $14 a share. What weight should be assigned to the preferred stock when computing the firm's weighted average cost of capital?
17.43 percent
15.21 percent
26.72 percent
33.33 percent
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