Question
Please see attached. Organic Produce Corporation has 7.8 million shares of common stock outstanding, 530,000 shares of 7.3 percent preferred stock outstanding, and 178,000 of
Please see attached. Organic Produce Corporation has 7.8 million shares of common stock outstanding, 530,000 shares of 7.3 percent preferred stock outstanding, and 178,000 of 8.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $64.30 per share and has a beta of 1.23, the preferred stock currently sells for $107.70 per share, and the bonds have 14 years to maturity and sell for 94.5 percent of par. The market risk premium is 6.95 percent, T-bills are yielding 5.65 percent, and the firm?s tax rate is 40 percent.
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