1. BetterPie Industries has 6 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 15,000 bonds. Assume the common shares are selling for $45 per share, the preferred shares are selling for $22.50 per share, and the bonds are selling for 98 percent of par.
2. What would be the weights used in the calculation of BetterPie’s WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Equity weight %
Preferred stock weight %
Debt weight %
3. A combination of two entities in which only one legally ceases to exist is:
a. a subsidiary
b. a parent company
c. a consolidation Incorrect
d. a merger