Answered: alculate the weights of capital…

Business

Finance

alculate the weights of capital components based on the book value balance sheet.

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 1dM

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weight of debt: W_d
weight of preferred stock: W_p
weight of total common equity: W_e

Here is the condensed 2015 balance sheet for Skye Computer Company (in thousands of dollars):

CONDENSED BALANCE SHEET FOR SKYE COMPUTER COMPANY
		FY2015
Current assets		$2,000
Net fixed assets		3,000
Total assets		$5,000

Total debt		$2,100
Preferred stock		250
Common stock		1,300
Retained earnings		1,350
Total common equity		$2,650
Total liabilities & equity		$5,000