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

question 39

Multiple Choice

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 shares sell for $126 per share, and the bonds sell for 117 percent of par ($1,000) , what weight should you use for preferred stock in the computation of OMG's WACC?

• A) 28.91 percent
• B) 31.58 percent
• C) 47.91 percent
• D) 83.66 percent

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Definitions:

Social Enterprise

organizations that operate commercially to address social problems, combining business practices with social objectives.

Philanthropic

Pertaining to the act of giving money, time, or effort to support a cause or mission that benefits society, often without financial or material return to the giver.

Commercial

Pertains to commerce or business activity in general; often used to describe advertisements on television or radio.

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The total amount of money used by the government to pay for services, infrastructure, public projects, and other governmental functions.