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Sea Shell Industries Has 50 Million Shares of Common Stock

Question 56

Multiple Choice

Sea Shell Industries has 50 million shares of common stock outstanding, 10 million shares of preferred stock outstanding, and 100 thousand bonds. If the common shares are selling for $19 per share, the preferred shares are selling for $8.50 per share, and the bonds are selling for 97 percent of par ($1,000) , what would be the weights used in the calculation of Sea Shell's WACC for common stock, preferred stock, and bonds, respectively?


A) 33.33 percent, 33.33 percent, 33.33 percent
B) 83.19 percent, 16.64 percent, 0.17 percent
C) 15.26 percent, 6.83 percent, 77.91 percent
D) 83.92 percent, 7.51 percent, 8.57 percent

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