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Highered Ltd has a $150,000 bond issue outstanding that is selling at 90 percent of face value. Highered Ltd also has 5,000 shares of preferred
Highered Ltd has a $150,000 bond issue outstanding that is selling at 90 percent of
face value. Highered Ltd also has 5,000 shares of preferred stock and 12,000 shares of common
stock outstanding. The preferred stock has a market price of $40 a share compared to a price
of $25 a share for the common stock. What is the weight of the preferred stock as it relates to
the firm's weighted average cost of capital?
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