Today is May 7, 2020.

You have been asked to estimate the Weighted Average Cost of Capital for Surtsey Corp. The firm's capital structure consists of debt, preferred stock and common stock. Questions 8-13 all pertain to the characteristics of the firm's capital structure components. You will be asked to compute the firm's WACC in Question #14.

Surtsey Corp. has 275,000 shares of 4.7% preferred stock outstanding, with a par value of $50 per share. Dividends are paid annually and the preferred stock is currently selling for $41.50 per share.

There are 2,500,000 shares of common stock outstanding. The most recent quote for the common stock of Surtsey Corp. is provided below:

Firm	Ticker	Open	High	Low	Close	Net Chg	Vol	PE	Div	YTD % Chg
Surtsey Corp.	SCS	19.79	20.01	19.64	19.99	-0.50	7,525,000	14.5	0.87	6.4

There are 120,000 bonds outstanding. The most recent bond quote for Surtsey Corp. is provided below:

Firm	Symbol	Coupon	Maturity	Rating Moody's/S&P	High	Low	Last	Change
Surtsey Corp.	SCS689002	3.81%	June 2045	Aa/AA-	81.654	80.211	81.387	0.458

What is the capital structure weight of debt that you would use to compute the firm's WACC? (You will be asked to compute the WACC in the next question).

• 13.73%

• 61.40%

• 50.00%

• 32.51%

• 48.62%