Answer: Option (d) is correct.
Explanation:
Correct option: Only a perfectly competitive firm operates at its efficient scale.
In the perfectly competitive market and in the long run, the firms who are making losses will exit the market and those firms who are able produce at a point where price is equal to the average total cost will exist in the market.
However, monopolistic firms operates at a below efficient level of production and with an excess capacity.
Competitive firms are generally enjoys the productive efficiency in the long run because these firms have the capability to produce at a lower average total cost.
The answer is A. The owner has a lot of his own money invested in the business.
Answer:
Milton Corporation
The company's cost of preferred stock is:
= 5.2%.
Explanation:
a) Data and Calculations:
Annual dividend per share = $5
Selling price of preferred stock = $100
Flotation cost per share = $3
The Company's cost of preferred stock, using the flotation cost is = Dividend per share/(Selling price - Flotation cost per share)
= $5/($100 - $3)
= $5/$97
= 0.052
= 5.2%
If the flotation cost was not incurred in the current period, the cost of preferred stock will be = $5/$100 = 0.05 = 5%
Answer:
$36,000 loss
Explanation:
net effect after taxes = [(operation's revenue - operation's expenses) - gain/loss resulting from sale] x (1 - tax rate)
= [($120,000 - $100,000) - $80,000] x (1 - 40%) = ($20,000 - $80,000) x 60% = -$60,000 x 60% = -$36,000 or $36,000 loss
