Question

Mitchell Co. has $1.1 million of debt, $3 million of preferred stock, and $3.3 million of common equity. What would be its weight on common equity

Answer 1

Answer:

0.45

Explanation:

Calculation for What would be its weight on common equity

Using this formula

Weight on common equity= Common equity/(Debt+Preferred stock+Common equity+ )

Let plug in the formula

Weight on common equity=$3.3 million /($1.1 million +$3 million +$3.3 million)

Weight on common equity=$3.3 million/$7.4 million

Weight on common equity=0.45

Therefore What would be its weight on common equity is 0.45