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Anon25 [30]
3 years ago
11

JackITs has 5.0 million shares of common stock outstanding, 1.0 million shares of preferred stock outstanding, and 20.00 thousan

d bonds. If the common shares are selling for $28.00 per share, the preferred share are selling for $13.50 per share, and the bonds are selling for 98.00 percent of par, what would be the weight used for equity in the computation of JackIT's WACC?
Business
1 answer:
Leya [2.2K]3 years ago
7 0

Answer:

80.88; 7.80; 11.32

Explanation:

Common Stock:

Value = Number × Price

          = 5,000,000 × $28

          = $140,000,000

Preferred Stock:

Value = Number × Price

          = 1,000,000 × $13.50

          = $13,500,000

Bonds:

Value = Number × Price

          = 20,000 × $980

          = $19,600,000

Total value = $140,000,000+ $13,500,000 + $19,600,000

                   = 173,100,000

Weight of common stock = Respective Value ÷ Total Value

                                          = $140,000,000 ÷ 173,100,000

                                          = 80.88

Weight of preferred stock = Respective Value ÷ Total Value

                                          = $13,500,000 ÷ 173,100,000

                                          = 7.80

Weight of Bonds = Respective Value ÷ Total Value

                            = $19,600,000 ÷ 173,100,000

                            = 11.32

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The portion of demand curve above the kink is more elastic implying, when oligopolist increase the price of its product none of its competitors will follow it with expectation to capture the market demand created due rise in prices by first firm.

The lower portion of the kink is relatively inelastic showing that in case an oligopolist reduces its price its rival firms will also reduce their prices with a view to not to lose their market demand. Thus, it will not beneficial for the oligopolist in either of the situations. Therefore, it will stick to the prevailing price.

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Four companies computed their days' sales in inventory as follows: Company A: 47.2 Company B: 36.5 Company C: 45.1 Company D: 39
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The most efficient and effective in managing its inventory is Company B.

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The budgeting process that involves adding a month to the end of the budget period at the end of each month, thus maintaining a
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b. continuous budgeting

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A small foundry agrees to pay $220,000 two years from now to a supplier for a given amount of coking coal. The foundry plans to
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Answer:

A) $24,602

Explanation:

We can solve this question by finding the periodic deposits needed by using the formula:

FV=PMT*\frac{(1+i)^n-1}{i}

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i = effective  interest rate per period = 0.0331

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However, since the interest is compounded monthly, let's also  calculate the effective interest rate

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Therefore,  $ $24,602  must be deposited every three months

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