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
KiRa [710]
3 years ago
12

The Auto Group has 1,000 bonds outstanding that are selling for $980 each. The company also has 9,700 shares of preferred stock

at a market price of $85 each. The common stock is priced at $80 a share and there are 43,000 shares outstanding. What is the weight of the preferred stock as it relates to the firm's weighted average cost of capital?
Business
1 answer:
DochEvi [55]3 years ago
4 0

Answer:

The first thing that we need to do in this question is find the total capital of the Group. They get their capital from three sources which are bonds, preferred stock and common stock. We need to find the capital provided by each of these 3 sources and add them up. After that we will see what ratio of capital is provided by preferred stock, and this ratio will be the weight of preferred stock as it related to the firms weighted average cost of capital.

Bonds

1000*980=980,000

Preferred stock = 9700*85= 824,500

Common stock= 43,000*80= 3,440,000

980,000+824,500+3,440,000= 5,244,500

Preferred weight = 824,500/5,244,500= 0.157 = 15.7%

The weight of preferred stock is 15.7%

Explanation:

You might be interested in
Which of the following is an unethical behavior for a salesperson?
Natalija [7]
The correct answer is A.
4 0
3 years ago
Read 2 more answers
Chelsea's house is for sale, and she is selling it through a real estate agent. The house is listed, and any licensed agent may
77julia77 [94]

Answer: Invitees.

Explanation:

Stan the property agent and Paula the potential buyer are invitees to Chelsea's property. An invitee is a person or group of people invited to the property of an individual for the purpose of a business transaction or a public visit.

6 0
3 years ago
Catherine has been managing her company for a couple of years. She now plans to expand her business by bringing in fresh funding
klio [65]
I would say that for Catherine, the best place to inform her investors about a new stock issue would be a news release on her company website so in that way it is made public, informs the investors and may attract more capital investment in the company as well.

4 0
3 years ago
Journal Entries and Trial Balance
brilliants [131]

Answer:

Heavenly Realty Journal entries can be found in the attached file

Explanation:

Dr Bank with $25,000

Cr. Capital Stock with $25,000

(being Faith Schultz transferred cash in exchange for Capital stock)

Dr. Rental of Office & equipment with $4,510

Cr. Bank with $4,510

(Being Rental costs for Office and Equipment)

Dr. Supplies with $1,330

Cr. Accounts Payable with $1,330

(Being cost of purchased supplies)

Dr. Supplies Expense with $740

Cr. Supplies with $740

(Being cost of supplies used)

Dr Accounts Payable with $490

Cr. Bank with $490

(being payment to Creditors)

Dr. Cash with $20,500

Cr. Sales commission with $20,500

(Being Sales Commission received)

Dr. Automobile Expense with $1,250

Dr. Miscellaneous Expense with $840

Cr. Bank with $2,090

(being  payment for automobile expense, rental charges & Miscellaneous expense)

Dr Office Salaries with $2,620

Cr. Bank with $2,620

(Being Payment for Office Salaries)

Dr Dividend with $1,210

Cr Bank with $1,210

(Being payment of Dividend)

6 0
3 years ago
We cannot provide any information about your refund. be sure to: verify your filing date; check with your tax preparer if you fi
stira [4]
Verify your filing date...
5 0
3 years ago
Other questions:
  • If a corporation has two classes of common stock, what is typically unique about the second or class b common stock?
    12·1 answer
  • A portfolio has an expected return of 12.3 percent. This portfolio contains two stocks and one risk-free security. The expected
    7·1 answer
  • Porsche AG uses the label "Top Guns" to describe one segment of its customers, namely those who care about power and control and
    13·2 answers
  • I NEEEEEEEEEEEED help and idea on a study website for learning im failing i cant really figure out how to use quizlet so any oth
    6·1 answer
  • Among the budget cuts that the city council is considering is a 5 percent reduction in funds for secondary education. As the pri
    6·1 answer
  • Nash Corporation has outstanding 343,000 shares of $10 par value common stock. The corporation declares a 10% stock dividend whe
    11·1 answer
  • Tamarisk, Inc. just took its physical inventory on December 31. The count of inventory items on hand at the companyâs business l
    7·2 answers
  • Operating income is one of the most important items reported by a company. Depending on the decision-making needs of management,
    11·1 answer
  • A low credit score can lead too?
    6·2 answers
  • Trans-Atlantic Quotes. Separated by more than​ 3,000 nautical miles and five time​ zones, money and foreign exchange markets in
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!