Question

MV Corporation has debt with market value of $ 100 ​million, common equity with a book value of $ 98 ​million, and preferred stock worth $ 20 million outstanding. Its common equity trades at $ 45 per​ share, and the firm has 5.9 million shares outstanding. What weights should MV Corporation use in its​ WACC? The debt weight for the WACC calculation is nothing​%. ​(Round to two decimal​ places.)

Answer 1

Capital Structure weights on a market value basis
Particulars	Number	Book Value	Face Value	Weights
Debt			100,000,000.00	25.94%
Common Equity	5,900,000.00	45.00	265,500,000.00	68.87%
Preferred Stock			20,000,000.00	5.19%
			385,500,000.00	100.00%
The debt weight for the WACC calculation is 25.94%