Question
Imperial Industries has $400,000 in short-term debt and $2.6 million in long-term debt. Their preferred shares sell for $50.00 each, and their are 100,000 shares
Imperial Industries has $400,000 in short-term debt and $2.6 million in long-term debt. Their preferred shares sell for $50.00 each, and their are 100,000 shares outstanding. Imperial's common stock sells for $32.00 per share, and there are 1 million shares outstanding.
- Use these data to calculate the value of Imperial's debt. Calculate the value to the nearest dollar.
- Use these data to calculate the value of Imperial's preferred equity. Calculate the value to the nearest dollar.
- Use these data to calculate the value of Imperial's common equity. Calculate the value to the nearest dollar.
- Use these data to calculate the value of Imperial's sources of funds (debt and equity). Calculate the value to the nearest dollar.
- Use these data to calculate the weight of Imperial's debt. Calculate the percentage to two decimal places (0.03148 = 3.15).
- Use these data to calculate the weight of Imperial's common equity. Calculate the percentage to two decimal places (0.03148 = 3.15).
- Use these data to calculate the weight of Imperial's preferred equity. Calculate the percentage to two decimal places (0.03148 = 3.15).
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Cost Of Capital Applications And Examples
Authors: Shannon P. Pratt, Roger J. Grabowski, Richard A. Brealey
5th Edition
1118555805, 9781118555804
