Peter's Audio Shop has a cost of debt of 7 percent, a cost of equity of 11 percent, and a cost of preferred stock of 8 percent. The firm has 104,000 shares of common stock outstanding at a market price of $20 a share
There are 40,000 shares of preferred stock outstanding at a market price of $34 a share. The bond issue has a total face value of $500,000 and sells at 102 percent of face value. The company's tax rate is 34 percent. What is the weighted average cost of capital for Peter's Audio Shop?
A) 6.14 percent
B) 6.54 percent
C) 8.60 percent
D) 9.14 percent
E) 9.45 percent
D
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Judd, Inc., owns 35% of Cosby Corporation. During the calendar year 2012, Cosby had net earnings of $300,000 and paid dividends of $30,000. Judd mistakenly recorded these transactions using the fair value method rather than the equity method of accounting. What effect would this have on the investment account, net income, and retained earnings, respectively?
a. Understate, overstate, overstate b. Overstate, understate, understate c. Overstate, overstate, overstate d. Understate, understate, understate
In technology-based markets, the marketing manager must understand who are the different customers that will purchase the product at the introductory stage of the product life cycle and who will purchase the product as it matures
Which of the following types of customers will be the last to buy the product? A) late majority B) early majority C) innovators D) laggards