OMG Inc Has 4 Million Shares of Common Stock Outstanding, 3

question 116

Multiple Choice

OMG Inc. has 4 million shares of common stock outstanding, 3 million shares of preferred stock outstanding, and 50 thousand bonds. If the common shares are selling for $21 per share, the preferred shares are selling for $10 per share, and the bonds are selling for 111 percent of par ($1,000) , what weight should you use for debt in the computation of OMG's WACC?

• A) 32.74 percent
• B) 29.86 percent
• C) 25.79 percent
• D) 21.86 percent