Green Yards Has a Capital Structure of 50 % Common

question 266

Multiple Choice

Green Yards has a capital structure of 50 % common stock, 15 % preferred stock, and 35 % debt. The flotation costs are 3 % for debt, 6 % for preferred stock, and 8 % for common stock. What is the weighted average flotation cost?

• A) 5.20 %
• B) 5.47 %
• C) 5.54 %
• D) 5.88 %
• E) 5.95 %

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