Problem

Weight of Preferred Stock OMG Inc. has 4 million shares of common stock outstanding, 3 mil...

Weight of Preferred Stock OMG Inc. has 4 million shares of common stock outstanding, 3 million shares of preferred stock outstanding, and 5 thousand bonds.  If the common shares sell for $17 per share, the preferred share sell for $26 per share, and the bonds sell for 108 percent of par, what weight should you use for preferred stock in the computation of OMG’s WACC?

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Solutions For Problems in Chapter 11