1. Blazingame Inc.’s capital components have the following market values:
Preferred Stock $17,500,000
Common Equity $48,350,000
Calculate the firm’s capital structure and show the weights that would be used for a weighted average cost of capital (WACC) computation.
2. The Aztec Corporation has the following capital components and costs. Calculate Aztec’s WACC.
Component Value Cost
Debt $23,625 12.0%
Preferred Stock $ 4,350 13.5%
Common Equity $52,275 19.2%
3. Willerton Industries Inc. has the following balances in its capital accounts as of 12/31/x3:
Long Term Debt $65,000,000
Preferred Stock $15,000,000
Common Stock $40,000,000
Paid in Excess $15,000,000
Retained Earnings $37,500,000
Calculate Willerton’s capital structure based on book values.
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