FarCry Industries, a Maker of Telecommunications Equipment, Has 26 Million

question 37

Multiple Choice

FarCry Industries, a maker of telecommunications equipment, has 26 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10 thousand bonds. If the common shares sell for $15 per share, the preferred shares sell for $114.50 per share, and the bonds sell for 101% of par ($1000) , what weight should you use for preferred stock in the computation of FarCry's WACC?

• A) 28.52%
• B) 27.51%
• C) 26.24%
• D) 22.25%

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