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30. Carrie D's has 6 million shares of common stock outstanding, 2 million shares of
preferred stock outstanding, and 10 thousand bonds. If the common shares are selling for $15 per
share, the preferred shares are selling for $28 per share, and the bonds are selling for 109
percent of par, what would be the weight used for equity in the computation of Carrie D's
WACC?
31. Solar Shades has 8 million shares of common stock outstanding, 4 million shares of
preferred stock outstanding, and 10 thousand bonds. If the common shares are selling for $13 per
share, the preferred shares are selling for $30 per share, and the bonds are selling for 105
percent of par, what would be the weight used for equity in the computation of Solar Shades'
WACC?
32. TellAll has 10 million shares of common stock outstanding, 20 million shares of preferred
stock outstanding, and 100 thousand bonds. If the common shares are selling for $32 per share,
the preferred shares are selling for $20 per share, and the bonds are selling for 106 percent of
par, what would be the weight used for preferred stock in the computation of TellAll's WACC?
33. Paper Exchange has 80 million shares of common stock outstanding, 60 million shares of
preferred stock outstanding, and 50 thousand bonds. If the common shares are selling for $20 per
share, the preferred shares are selling for $10 per share, and the bonds are selling for 105
percent of par, what would be the weight used for preferred stock in the computation of Paper's
WACC?
34. Town Crier has 10 million shares of common stock outstanding, 2 million shares of
preferred stock outstanding, and 10 thousand bonds. If the common shares are selling for $28 per
share, the preferred shares are selling for $15.50 per share, and the bonds are selling for 97
percent of par, what would be the weight used for debt in the computation of Town Crier's
WACC?
35. Bill's Boards has 20 million shares of common stock outstanding, 4 million shares of
preferred stock outstanding, and 20 thousand bonds. If the common shares are selling for $30 per
share, the preferred shares are selling for $17 per share, and the bonds are selling for 96 percent
of par, what would be the weight used for debt in the computation of Bill's WACC?
36. Suppose that TipsNToes, Inc.'s capital structure features 40 percent equity, 60 percent
debt, and that its before-tax cost of debt is 9 percent, while its cost of equity is 15 percent. If the
appropriate weighted average tax rate is 34 percent, what will be TipsNToes' WACC?
37. Suppose that Model Nails, Inc.'s capital structure features 60 percent equity, 40 percent
debt, and that its before-tax cost of debt is 6 percent, while its cost of equity is 10 percent. If the
appropriate weighted average tax rate is 28 percent, what will be Model Nails' WACC?
38. Suppose that Hanna Nails, Inc.'s capital structure features 45 percent equity, 55 percent
debt, and that its before-tax cost of debt is 5 percent, while its cost of equity is 9 percent. If the
appropriate weighted average tax rate is 40 percent, what will be Hanna Nails' WACC?
39. Suppose that Glamour Nails, Inc.'s capital structure features 30 percent equity, 70
percent debt, and that its before-tax cost of debt is 4 percent, while its cost of equity is 10
percent. If the appropriate weighted average tax rate is 34 percent, what will be Glamour Nails'
WACC?
40. TJ Industries has 7 million shares of common stock outstanding with a market price of
$20.00 per share. The company also has outstanding preferred stock with a market value of $10
million, and 100,000 bonds outstanding, each with face value $1,000 and selling at 95 percent of
par value. The cost of equity is 12 percent, the cost of preferred is 10 percent, and the cost of
debt is 6.45 percent. If TJ's tax rate is 34 percent, what is the WACC?
41. PNB Industries has 20 million shares of common stock outstanding with a market price of
$18.00 per share. The company also has outstanding preferred stock with a market value of $50
million, and 500,000 bonds outstanding, each with face value $1,000 and selling at 97 percent of
par value. The cost of equity is 15 percent, the cost of preferred is 12 percent, and the cost of
debt is 8.50 percent. If PNB's tax rate is 40 percent, what is the WACC?
42. PAW Industries has 5 million shares of common stock outstanding with a market price of
$8.00 per share. The company also has outstanding preferred stock with a market value of $10
million, and 100,000 bonds outstanding, each with face value $1,000 and selling at 96 percent of
par value. The cost of equity is 19 percent, the cost of preferred is 15 percent, and the cost of
debt is 9 percent. If PAW's tax rate is 34 percent, what is the WACC?
43. Suppose that TW, Inc. has a capital structure of 25 percent equity, 15 percent preferred
stock, and 60 percent debt. If the before-tax component costs of equity, preferred stock and debt
are 13.5 percent, 9.5 percent and 4 percent, respectively, what is TW's WACC if the firm faces an
average tax rate of 30 percent?
44. Suppose that PAW, Inc. has a capital structure of 60 percent equity, 10 percent preferred
stock, and 30 percent debt. If the before-tax component costs of equity, preferred stock and debt
are 17.5 percent, 12 percent and 6.5 percent, respectively, what is PAW's WACC if the firm faces
an average tax rate of 28 percent?
45. Suppose that TNT, Inc. has a capital structure of 43 percent equity, 23 percent preferred
stock, and 34 percent debt. If the before-tax component costs of equity, preferred stock and debt
are 15.4 percent, 10 percent and 7 percent, respectively, what is TNT's WACC if the firm faces an
average tax rate of 28 percent?
46. JAK Industries has 5 million shares of stock outstanding selling at $25 per share and an
issue of $40 million in 8 percent, annual coupon bonds with a maturity of 15 years, selling at 108
percent of par ($1000). If JAK's weighted average tax rate is 34 percent and its cost of equity is
15 percent, what is JAK's WACC?
47. FDR Industries has 50 million shares of stock outstanding selling at $30 per share and an
issue of $200 million in 9.5 percent, annual coupon bonds with a maturity of 10 years, selling at
105 percent of par ($1,000). If FDR's weighted average tax rate is 28 percent and its cost of
equity is 16 percent, what is FDR's WACC?
48. XYZ Industries has 10 million shares of stock outstanding selling at $10 per share and an
issue of $30 million in 8.5 percent, annual coupon bonds with a maturity of 25 years, selling at
102 percent of par ($1,000). If XYZ's weighted average tax rate is 40 percent and its cost of
equity is 15 percent, what is XYZ's WACC?
49. Cup Cake Ltd. has 20 million shares of stock outstanding selling at $25 per share and an
issue of $30 million in 8 percent, annual coupon bonds with a maturity of 16 years, selling at 98
percent of par ($1,000). If Cup Cake's weighted average tax rate is 34 percent, its next dividend is
expected to be $2.00 per share, and all future dividends are expected to grow at 4 percent per
year, indefinitely, what is its WACC?
