JackITs Has 5 Million Shares of Common Stock Outstanding,1 Million

question 50

Multiple Choice

JackITs has 5 million shares of common stock outstanding,1 million shares of preferred stock outstanding,and 20 thousand bonds.If the common shares are selling for $28 per share,the preferred share are selling for $13.50 per share,and the bonds are selling for 98 percent of par,what would be the weight used for equity in the computation of JackITs' WACC?

• A)33.33 percent
• B)80.88 percent
• C)83.08 percent
• D)91.19 percent

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Definitions:

Absolute Values

The non-negative value of a number regardless of its sign; it represents the distance of a number on the number line from zero.

Multiply

To increase a quantity by another quantity, a basic mathematical operation involving the addition of a number to itself a specified number of times.

Intercept

In the context of regression models, it refers to the value of the dependent variable when all independent variables are zero.