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
andrew11 [14]
3 years ago
7

For purposes of estimating the firm's WACC, what are the weights of long-term debt, preferred stock, and equity given the follow

ing information from the balance sheet: The value of common stock is $60,000, retained earnings equal $40,000, total common equity equals $100,000, preferred stock has a value of $10,000 and long-term debt totals $120,000.
Business
1 answer:
katrin2010 [14]3 years ago
4 0

Answer and Explanation:

The computation is shown below;

Total value is

= Value of debt + Value of preferred stock + Value of equity

= $120,000 + $10,000 + $100,000

= $230,000

Now

Weight of debt is

= Value of debt ÷ Total value of firm

= $120,000 ÷ $230,000

= 0.52 or 52.17%

The Weight of preferred stock is

= Value of preferred stock ÷ Total value of the firm

= $10,000 ÷ $230,000

= 4.35%

And,

The Weight of equity is

= Value of equity ÷ Total value of the firm

= $100,000 ÷ $230,000

= 43.48%

You might be interested in
A local company makes athletic clothing and they are preparing aggregate production plans on a quarterly basis for the coming ye
My name is Ann [436]
I think is is 125 hope its right
3 0
3 years ago
Written, Inc. has outstanding 600,000 shares of $2 par common stock and 120,000 shares of no-par 8% preferred stock with a state
Vitek1552 [10]

Answer:

$126,000

Explanation:

Given:

Total outstanding stocks = 600,000

Price per share of common stock = $2

Number of preferred stock = 120,000

Interest rate = 8%

Stock Value = $5

Outstanding year = 3

Total Amount of preferred stock = Principle × Rate × Time

or

Total Amount of preferred stock = ( 120,000 × $5 ) × 0.08 × 3 = $144,000

Since,

The preferred stock value is more than the amount distributed

Hence,

the total amount distributed i.e $126,000 will be received by the preferred stockholders

6 0
3 years ago
What happens if you fail to pay your annual taxes?
aleksklad [387]

Answer and Explanation:

Simply enough, the IRS comes for you and charges a failure to pay penalty. The penalty is 0.5% of your previous unpaid taxes for every month. So if you wouldn't want to lose more money, I'd suggest you pay your taxes.

7 0
2 years ago
Should eyewitness testimony be allowed in the courtroom? Write at least three paragraphs discussing your position.
Andrews [41]
(Paragraph 1) Should eyewitness testimony be allowed in the courtroom? No but at the same time yes. There are many reasons why they should but shouldn't. It is a risk to their safety, some eyewitnesses are not liable, they could be paid off but at the same time their testimony could help win a case. (Paragraph 2) Depending on a crime, the eyewitness safety could be in danger. If the case was against a member of a gang or mafia. They could send someone after that witness. This is reason why we have the Witness Protection Program. If they testify they put their lives at risk. (Paragraph 3) Having a witness is a key thing to have. If you have a witness you are the one who most likely the one to win the case. In some cases you could have problems with the witness not being liable, getting paid off to not say anything or to lie. Or in most cases if they are confused they will not have them testify. Or they aren't straight on the details and keep changing the story that usually means they are lying on what they saw. Note: This is a summary. Add more and edit it to make it sound like something you would type.
7 0
3 years ago
the spread between the interest rates on bonds with default risk and default-free bonds is called the:
jeka57 [31]

The spread between the interest rates on bonds with default risk and default-free bonds is called the risk premium.

A default-free bond is a bond in which the bond issuer would not miss scheduled payments of either the coupon or principal. Bonds issued by the government are generally considered to be default-free. This is because the government can print money to make payments.

A bond with a default risk is a bond in which the bond issuer can miss scheduled payments of either the coupon or the principal. Bonds issued by private individuals are generally considered to be bonds with default risk.

Bondholders usually demand a compensation for holding bonds with a default risk. This compensation is known as risk premium.

Risk premium = return on bonds with default risk - return on default- free bond.

To learn more, please check: brainly.com/question/4304080?referrer=searchResults

5 0
3 years ago
Other questions:
  • Qualitative data has been described as voluminous and sometimes overwhelming to the researcher. in what ways could a researcher
    15·1 answer
  • If other factors are held constant, what happens to a confidence interval if the sample variance increases?
    8·1 answer
  • What does an exchange rate tell you??
    14·1 answer
  • Towson Company manufactures book cases, and each requires 28 board feet of lumber. Towson expects that 2,000 and 1,850 book case
    13·1 answer
  • "cost assignment refers to the general case of assigning costs to cost pools or cost objects. when there is a direct and traceab
    6·1 answer
  • Bill and his wife, Vickie, want to start a company that develops training sessions for corporate clients. They would like to sha
    6·2 answers
  • Calculate how much each of the following items is worth in terms of today's dollars using 180 as the price index for today.
    12·1 answer
  • Q2. Why can the distinction between fixed costs and variable costs be made in the short run? Classify the following as fixed or
    15·1 answer
  • On January 1, 2019, Cullumber Corporation acquired machinery at a cost of $1650000. Cullumber adopted the straight-line method o
    11·1 answer
  • Silver Corporation incurred costs of $600,000 for managing the wholesale division during the year. The customer details of the c
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!