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. is the symbol that represents the cost of preferred stock in the weighted average cost of capital (WACC) equation.
Bryant Co. has $2.3 million of debt, $1.5 million of preferred stock, and $1.8 million of common equity. What would be its weight on common equity?
A. 0.32
B. 0.24
C. 0.22
D. 0.30

Option A is the correct answer

Weight of equity =0.32

Explanation:

Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund.

The weight is the market value of nominal value of the source of fund as a proportion of the total capital funds.

Total capital funds = Debt funds + Preferred Funds + Equity funds

                              = ($2.3 + $1.5 + $1.8 ) million  = $5.6  million

Weight of equity = Equity capital/Total capital funds

                           = 1.8/5.6 =0.32

Weight of equity =0.32

x=3

step-by-step explanation:

this is really simple i saw that there was only one term (5x) and thought if that was 15 what would i have to multiply everything else to get it there? well if 5x became 15 then x would have to be 3 so plug the 3 in the x for the other equations and you get 15 for the other ones. so there you go. : )