Consider Frank’s decision to go to college. If he goes to college, he will spend $21,000 on tuition, $1,800 on books, and $11,
1 answer:
Answer:
b. $42,600
Explanation:
First, we calculate the total cost of college:
Now, we calculate the net income she would receive, if she didn't go to the college:
Finally, the opportunity cost of going to college is the result of adding the total cost of college plus the net income that she would receive if she works instead of going to college.
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Answer:
Weight of debt = 57.83 %
Explanation:
given data
number of shares = 7,100
price = $94 per share
number of bonds = 600
mature time = 30 year s
coupon rate = 6.8 percent
bonds par value = $2,000
sell = 108.5 percent
stock outstanding = 6,000 shares
stock outstanding price = $47 per share
to find out
capital structure weight of the debt
solution
first we get here Equity market value that is express as
Equity market value = number of shares × price per share
Equity market value = 7100 × $94
Equity market value = $667,400
and
current debt value will be here as
current debt value = number of bonds × price per bond
current debt value = 600 × (1.085 × 2000)
current debt value = $1,302,000
and now Preferred stock value will be
Preferred stock value = stock outstanding × stock outstanding price
Preferred stock value = 6,000 × $47
Preferred stock value = $282000
and total capital will be as
Total capital = Equity market value + current debt value + preferred stock value ..................1
put here value
Total capital = $667,400 + $1,302,000 + $282000
total capital = $2251400
so here Weight of debt will be
Weight of debt = debt value ÷ total capital ..............2
Weight of debt =
Weight of debt = 0.578306
Weight of debt = 57.83 %