Yakov Co. has $2.3 million of debt, $3.04 million of preferred stock, and $1.34 million of common equity is the symbol that represents the cost of preferred stock in the weighted average cost of capital (WACC) equation.
The math is easy. Divide the present value of each stock position by the total value of the portfolio and multiply by 100 to convert it to a percentage. These weights indicate how dependent the portfolio's performance is on individual stocks.
The cost of preferred stock represents the rate of return required by preferred shareholders and is calculated by dividing the annual preferred dividend (DPS) paid by the current market price.
WACC equation Part 2 – Borrowing Costs and Preferred Stock
Borrowing cost is the rate of return to maturity on a company's debt; similarly, the cost of preferred stock is the rate of return on a company's preferred stock.
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Answer:
B) $90,000
Explanation:
Distribution of appreciated property to the stockholders of an S Corporation are taxable, and must be recorded at fair market value. In this case, Zachariah is the only stockholder, but the same rule applies. Zachariah's taxable gain = fair market value - stock basis = $100,000 - $10,000 = $90,000.
Answer:
A neutral third party from outside the organization will hear the case via a nonbinding process.
Explanation:
Assuming in an alternative dispute resolution program (ADR), the concerned employee and supervisor have finished the peer review stage and have not reached a settlement.
The most likely next stage in the ADR process would be to invite a neutral third party such as a mediator or negotiator from outside the organization, who will hear the case via a nonbinding process.
Answer: Non price competition
Explanation: In simple words, non price competition refers to a business strategy under which the firms in the industry compete with each other on the factors like product attributes, customer service, special features etc.
The firms tries to enhance the value of the product by factors other than price. These, kinds of strategies is usually used in markets where small price change can impact the customer base heavily.
Answer:
$8.5 million
Explanation:
On January 1, year 1, a company purchased equipment for $100 million.
The equipment consists of four major components, of which two components comprise 80% of the total cost and each has a 20-year useful life.
The remaining two components have costs of $10 million each; one of them has a useful life of four years, and the other has a useful life of five years.
Straight-line method of depreciation is given by the formula: Cost / Number of years
COMPONENT 1 2 3 4
COST 40M 40M 10M 10M
YEARS 20 20 4 5
DEPRECIATION 2M 2M 2.5M 2M
Therefore Total depreciation cost for year 1 = 2+2+2.5+2 = $8.5 million
