1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Agata [3.3K]
2 years ago
8

Honeycutt Co. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt.

Plan II would result in 9,800 shares of stock and $247,000 in debt. The interest rate on the debt is 10 percent. The all-equity plan would result in 15,000 shares of stock outstanding. Ignore taxes for this problem. a. What is the price per share of equity under Plan I
Business
1 answer:
irina [24]2 years ago
5 0

Answer: $47.50

Explanation:

The Price per share under Plan I can be calculated by the formula;

Price per share = Value of debt / (Number of shares under all-equity plan - Number of shares under Plan)

= 109,250 / ( 15,000 - 12,700)

= 109,250 / 2,300

= $47.50

You might be interested in
Rachel's Designs has 1,800 shares of 5%, $50 par value cumulative preferred stock issued at the beginning of 2019. All remaining
Liono4ka [1.6K]

Answer:

Out of $15,000, the $13500 will be paid to preference stockholders and the remaining $1500 will be paid to equity stockholders

Explanation:

Given the information:

Rachel's Designs has 1,800 shares of 5%, $50 par value

The company plans to pay total dividends of $15,000 in 2021

For computing the preferred dividend, first we have to find out the yearly dividend which is shown below:

= Number of shares × par value per share × dividend rate

= 1,800*$50*5%

= $4,500

Since in 2019 and 2020 the dividend is not paid

The dividend arrears for 2019 and 2020 would be:

= $4,500 + $4,500

= $9000

=>   The total dividend is:

= $4,500 + $9000

= $13,500

So, for the common stockholder, it is

= $15,000 - $13,500

= $1500

Hence, out of $15,000, the $13500 will be paid to preference stockholders and the remaining $1500 will be paid to equity stockholders

7 0
2 years ago
What is the legal business name of a sole proprietorship
I am Lyosha [343]

Answer:

i dont know

Explanation:

4 0
2 years ago
Which of the following most accurately explains why fiat money has value ?
rodikova [14]

Answer:

MRCORRECT has answered the question

Explanation:

Fiat money has value because the government declares that it has value.

8 0
3 years ago
When it comes to the field of marketing, which of these activities is associated with logo design?
tekilochka [14]
Sales Promotions are a part of the business
5 0
2 years ago
Which of the following investment plans best reflects diversification?
lora16 [44]
Kenya invests in stocks, bonds, and mutual funds.
4 0
2 years ago
Read 2 more answers
Other questions:
  • City residents were recently surveyed about issues of importance in their neighborhoods. Most agreed that crime was a big concer
    11·2 answers
  • Liability coverage is _____.    
    13·2 answers
  • A manager striving to improve organizational ___________ is accomplishing tasks that help achieve organizational objectives. a.
    15·1 answer
  • Sunland Company manufactures a line of lightweight running shoes. CEO Mark Sunland estimated that the company would incur $3,379
    6·1 answer
  • Leroy's personal information is shown below:
    14·1 answer
  • Reporting Stockholders' Equity
    10·1 answer
  • When a firm shifts from transactional selling to a value-added and relationship approach, a number of changes have to take place
    7·1 answer
  • Robert and Charles are trying to decide what form of business to form for their new company. They ask you the following question
    9·1 answer
  • What are some benefits of using computers for accounting purposes?.
    15·1 answer
  • Research that provides detailed verbal or visual information about consumers feelings is _______ data.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!