a. The market value of its equity is computed as shown below:
= 1.4 million shares x $ 49.37 + $ 29.4 million
= $ 98.52 million Approximately
b. The market value of debt is computed as follows:
= $ 20.4 million x 103%
= $ 21.01 million Approximately
c. The debt weight for WACC calculation is computed as follows:
= $ 21.01 million / ( $ 21.01 million + $ 98.52 million )
= 0.18 Approximately
The equity weight for WACC calculation is computed as follows:
= $ 98.52 million / ( $ 21.01 million + $ 98.52 million )
= 0.82 Approximately
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