The following information comes from the balance sheet of Roamer Enterprises
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. For purposes of estimating the firm's WACC, what are the weights of long-term debt, preferred stock, and equity?
A) D/V = 52.17%, PS/V = 43.48%, and E/V = 4.35%
B) D/V = 52.17%, PS/V = 4.35%, and E/V = 43.48%
C) D/V = $120,000, PS/V = $10,000, and E/V =$100,000
D) There is not enough information to answer this question.
Answer: B
Explanation: B) D/V = $120,000/$230,000 = 52.17%, P/V = $10,000/$230,000 = 4.35%,
E/V = $100,000/$230,000 = 43.48%.
You might also like to view...
If your application letter and résumé fail to bring a response within a week or so after the position close date,
A) let the CEO of the company know that you're being mistreated. B) follow up by email or telephone. C) cross this particular job possibility off your list. D) send another copy of your application letter and résumé. E) assume that the employer has offered the job to someone else.
Construction in Progress is an inventory account typically valued at on the balance sheet at net realizable value.?
Indicate whether the statement is true or false
A limited liability company must be managed by nonmembers
Indicate whether the statement is true or false
Stark Industries currently trades for $50 per share and has 175M shares outstanding. It announces that it will execute a reverse-split on a 1-for-3 basis. How many shares will be outstanding after the split?
A) 52.50 M B) 58.33 M C) 116.67 M D) 175.00 M E) 233.33 M