Weight of Debt
OMG Inc. has 6 million shares of common stock outstanding, 5 million shares of preferred stock outstanding, and 7,000 bonds. Suppose the common shares are selling for $29 per share, the preferred shares are selling for $28 per share, and the bonds are selling for 108 percent of par.
What weight should you use for debt in the computation of OMG’s WACC? (Round your answer to 2 decimal places.)
Weight used %