FarCry Industries, a Maker of Telecommunications Equipment, Has 6 Million

question 66

Multiple Choice

FarCry Industries, a maker of telecommunications equipment, has 6 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10 thousand bonds. If the common shares are selling for $27 per share, the preferred shares are selling for $15 per share, and the bonds are selling for 119 percent of par ($1,000) , what weight should you use for debt in the computation of FarCry's WACC?

• A) 4.93 percent
• B) 5.07 percent
• C) 5.81 percent
• D) 6.30 percent

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Definitions:

Cancer Development

The process by which normal cells undergo mutations and changes, leading to the uncontrolled growth and division that characterizes cancer.

Industrial Pollution

Contamination of the environment, including air, water, and soil, caused by industrial activities.

Second-Hand Smoke

Smoke that is exhaled by smokers or emitted from the burning end of cigarettes, cigars, or pipes, posing health risks to non-smokers who inhale it.

Cancers

A group of diseases characterized by the uncontrolled growth and spread of abnormal cells in the body.