XYZ Co has 2350 bonds with a price of 925 15000 shares of pr

XYZ Co. has 2,350 bonds with a price of $925, 15,000 shares of preferred stock with a price of $55, and 250,000 share of common stock with a selling price of $32. Calculate the capital structure weights of bonds, preferred stock, and common stock, respectively.

Solution

a

b

c

D=b*c

E=d/total *100

(in Percentage)

Instrument

Number

Per Value

Total Value

Weight

Weight

Bonds

2350

925

2173750

=2173750/10998750*100 =19.77%

19.77%

Preferred stock

15000

55

825000

=825000/10998750*100

= 7.50%

7.50%

Common Stock

250000

32

8000000

=8000000/10998750*100

= 72.73%

72.73%

Total

10998750