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28 Nov 2020
The calculation of WACC involves calculating the weighted average of the required rates of return on debt and equity, where the weights equal the percentage of each type of financing in the firm's overall capital structure.
Re is the symbol that represents the cost of raising capital by issuing new stock in the weighted average cost of capital (WACC) equation.
Reymond Co. has $1.1 million of debt, $1 million of preferred stock, and $2.1 million of common equity. What would be its weight on common equity?
a) 0.19
b) 0.24
c) 0.50
d) 0.22
The calculation of WACC involves calculating the weighted average of the required rates of return on debt and equity, where the weights equal the percentage of each type of financing in the firm's overall capital structure.
Re is the symbol that represents the cost of raising capital by issuing new stock in the weighted average cost of capital (WACC) equation.
Reymond Co. has $1.1 million of debt, $1 million of preferred stock, and $2.1 million of common equity. What would be its weight on common equity?
a) 0.19
b) 0.24
c) 0.50
d) 0.22
Ronaldo MendozaLv10
15 Jan 2021
