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
goldenfox [79]
3 years ago
10

OMG Inc. has 4 million shares of common stock outstanding, 3 million shares of preferred stock outstanding, and 50 thousand bond

s. If the common shares are selling for $21 per share, the preferred shares are selling for $10 per share, and the bonds are selling for 111 percent of par ($1,000), what weight should you use for debt in the computation of OMG's WACC?
Business
1 answer:
babymother [125]3 years ago
8 0

Answer:

w_{d} = 0.3274 or, 32.74%

Explanation:

We know,

Capital Structure = Debt + Common Stock + Preferred stock

Given,

Common Stock = 4,000,000 shares

Share price = $21

Total common stock = No. of shares x share price

Total common stock = 4,000,000 shares × $21 = $84,000,000

Preferred Stock = 3,000,000 shares

Share price = $10

Total preferred stock = $10 x 3,000,000 shares

Total preferred stock = $30,000,000

Debt rate = 111% = 1.11

Debt = 50,000 bonds x $1000 par x 1.11

Debt = $55,500,000

Total Capital = $(55,500,000 + 84,000,000 + 30,000,000)

Total capital structure = $169,500,000

The weight for debt in the computation of OMG's WACC

= \frac{Debt}{Total Capital Structure}

= \frac{55,500,000}{169,500,000}

= 0.3274

or, 32.74%

You might be interested in
Each firm in a competitive market has a cost function​ of: Upper C equals 49 plus q squared​, so its marginal cost function is M
adell [148]

Answer:

Output = 5

Explanation:

As per the data given in the question,

Output per firm :

Marginal cost = Average total cost

MC = ATC (Since in long run each type of firm is earning zero economic profit)

(49 + q^2)  ÷ q = 2q

49 + q^2 = 2q^2

49 = q^2

q = 7

Average total cost = (49 + 49) ÷ 7

= 98 ÷ 7

= 14

Hence, Price = min ATC = MR = 14

Market quantity (Q)

= 49 - 14

= 35

Number of firms

= Total quantity ÷ Output per firm

= 35 ÷ 7

= 5

3 0
2 years ago
John Gates made $25,000 last year and paid $2,500 in taxes. What percentage of his income did John pay in taxes?
Katen [24]

Answer:

10%

Explanation:

The Percentage of tax that John pays on his income last year shall be calculated using the below mentioned formula

Percentage of taxes=taxes paid by John/total income of John last year

In the given question

tax paid by John=$2,500

total income of John last year=$25,000

Percentage of taxes=2,500/25,000=10%

8 0
2 years ago
A factory produces short-sleeved and long-sleeved shirts. A short-sleeved shirt requires 30 minutes of labor, a long-sleeved shi
Orlov [11]

Answer:

Profit= $5200

Explanation:

let the short sleeved shirt be x and long sleeved shirt be y then according to the given conditions 30x+45y=240(60) minutes---A

also x+y=400------B

multiplying b with 30 gives

30x+30y=12000------C

subtracting C from A 15y= 2400

y= 160 long sleeved shirts and x= 240 short sleeved shirts are made

Profits= 240*11+160*16=$5200

6 0
3 years ago
Refer to Stevenson, Ross, and Warner. Which of the following represents a key component of the Sarbanes-Oxley Act relating to co
antoniya [11.8K]

Answer:

The correct answer is B. Accounting firms are prohibited from providing many types of consulting services to the companies they audit.

Explanation:

The main reason for this policy is that it does not allow conflicts of interest to arise that eventually produce widely known cases of fraud, such as those presented at the Enron and Worldcom companies.

The Enron case broke out in the U.S. when that energy giant announced what was once the biggest bankruptcy in the history of the country, with a debt of 31,000 million dollars, something overcome a few months later by the collapse of another colossus, WorldCom.

In June 2002 WorldCom, the second US telephone. and of the world, he admitted that he had lied in his accounting books for almost 4,000 million dollars and his actions - which shortly before touched his maximum of 16 dollars - collapsed to 20 cents. His bankruptcy exceeded Enron's: $ 35 billion of liabilities.

4 0
2 years ago
The first step in the CRM process is analyzing data. creating a data warehouse. rewarding loyal customers. developing CRM progra
uranmaximum [27]

Answer:

Creating a data warehouse

Explanation:

Customer relationship management or CRM aims at creating and maintaining good customer relationships, providing better customer satisfaction so as to increase sales.

CRM focuses upon providing good customer support and customer feedback.

The primary step, in Customer Relationship management is creating a data warehouse. Data warehouse refers to a database from where extraction of customer details gets convenient.

Such database can be used for data analysis and reveals customer habits and past purchase trends.

5 0
3 years ago
Other questions:
  • A code that governs our behaviors in any certain situation is known as our code of what?
    12·2 answers
  • New batteries are needed to power our electronic devices—our cell phones, tablets, and computers—and that market is exploding. R
    8·1 answer
  • ____ is the amount of data that can be transferred in a fixed time period.
    5·1 answer
  • A good with many close substitutes is likely to have relatively ______ demand, since consumers can easily choose to purchase one
    13·1 answer
  • Describe the differences between traditional marketing communication strategies and service business communication strategies.
    15·1 answer
  • During summer vacation, you charge people $8 per hour for swimming lessons and a $20 registration fee. If you make $52 one day,
    9·1 answer
  • Coronado Company's records indicate the following information for the year:
    12·1 answer
  • Halsted Corp. has identified three cost pools in its manufacturing process: equipment maintenance, setups, and quality control.
    15·1 answer
  • The conflict escalation cycle:___________.
    13·1 answer
  • Michael has been saving his money and wants to invest it. After doing some research, he has decided to invest $20,000 into a Cer
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!