George Washington: Washington has been called the "Father of His Country" for his manifold leadership in the formative days of the new nation.
Answer:
Weight of equity = 0.31067 or 31.067% or 96/309
Explanation:
WACC or weighted average cost of capital is the cost of a firm's capital structure which can comprise of debt, preferred stock and common equity. The WACC for a firm can be calculated as follows,
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component based on market value in the capital structure
- r represents the cost of each component
- D, P and E represents debt, preferred stock and common equity respectively
To calculate the weight of equity in WACC computation, we first need to find out the Market value(MV) of each component and the market value of the overall capital structure.
MV of common equity = 8 million shares * 12 per share
MV of common equity = $96 million
MV of Preferred stock = 6 million shares * 30 per share
MV of Preferred stock = $180 million
The bonds are usually have a par value of $1000 unless specified otherwise.
MV of debt = 30 thousand * $1000 * 110%
MV of debt = $33 million
MV of total capital Structure = 96 + 180 + 33 => $309 million
Weight of equity = 96 / 309
Weight of equity = 0.31067 or 31.067% or 96/309
Answer:
c.$ 2.92 per share
Explanation:
The earnings per share is calculated by dividing the net income by the weighted average number of shares outstanding. The bond holders converted their bonds into shares on July 01, 20x9 so their shares were only outstanding for 6 months.
The weighted average number of shares is determined as follows:
January - June 10,000 shares
July December 10,000 + (20 *200= 4,000 shares) 14,000 shares
The weighted average no of shares outstanding is 12,000 shares
The net income $ 35,000
Earnings per share $ 2.92 per share
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Answer:
Option (D) is correct.
Explanation:
Given that,
Variable cost of one unit = $3
Variable cost of two units = $6
Marginal cost refers to the cost of producing an additional unit of an output and it is added to the total cost of production.
Therefore,
Marginal cost:
= Variable cost of two units - Variable cost of one unit
= $6 - $3
= $3
Hence, the marginal cost associated with two units of production is $3.
