28

Scout Corporation has income before taxes of $400,000 and a loss on discontinued operations of $100,000. If the income tax rate is 25% on all items, the statement of comprehensive income should show income from continuing operations and net income, respectively, of:

$300,000 and $75,000.

$325,000 and $75,000.

$325,000 and $100,000.

26-The capital structure of ABC Inc. is as follows: 30% Debt, 20% Preferred stock and 50% common equity. The bond yield to maturity is 11%; the cost of preferred stock is 10 %; and the cost of common equity (in the form of retained earnings) is 14 %. Assume that the corporate tax rate is 30%, what is the weighted average cost of capital for ABC.

12.41

11.31

9.89

10.52

$300,000 and $100,000