What weight should be assigned to the bonds


Problem

A firm has 150 bonds outstanding that are selling for $1,000 each, 2,000 shares of preferred stock with a market price of $86 per share, and 40,000 shares of common stock valued at $45 per share. What weight should be assigned to the bonds when computing the weighted average cost of capital?

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Finance Basics: What weight should be assigned to the bonds
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