LOCKDOWN Corp. has the ending balances as December 31, 2020: Cash - 110,000 Fixed Assets - 155. 000; Current Liabilities - 124,000. Long Term Liabilities - 56, 670, Common Stock - 26,000, Retained Earnings - 58,330. Assume that the cost of debt is 10%, cost of common stock 13.50%, cost of retained earnings 12%. What is the cost of debt marginal weight? O 68.18 O 50.20 O 60.89
LOCKDOWN Corp. has the ending balances as December 31, 2020: Cash - 110,000 Fixed Assets - 155. 000; Current Liabilities - 124,000. Long Term Liabilities - 56, 670, Common Stock - 26,000, Retained Earnings - 58,330. Assume that the cost of debt is 10%, cost of common stock 13.50%, cost of retained earnings 12%. What is the cost of debt marginal weight? O 68.18 O 50.20 O 60.89
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 1PEA
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Question
![LOCKDOWN Corp. has the ending
balances as December 31, 2020:
Cash - 110,000 Fixed Assets - 155,
000; Current Liabilities - 124,000.
Long Term Liabilities - 56, 670,
Common Stock - 26,000, Retained
Earnings - 58,330. Assume that the
cost of debt is 10%, cost of common
stock 13.50%, cost of retained
earnings 12%. What is the cost of
debt marginal weight?
68.18
50.20
60.89
Compute for the market value of the
following securities: Debt - 10,000 @
1150 Preferred stock - 55,000 @ 65
Common Stock 78,500 @ 65. The
common stock compose of 30%
retained earnings
18, 246,750
18, 246,000
18, 224, 750](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef748c41-690b-46e6-b8ef-e9b3328d97b8%2F0fff874e-d7f7-49ef-9242-70946f321837%2F4e3zrn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:LOCKDOWN Corp. has the ending
balances as December 31, 2020:
Cash - 110,000 Fixed Assets - 155,
000; Current Liabilities - 124,000.
Long Term Liabilities - 56, 670,
Common Stock - 26,000, Retained
Earnings - 58,330. Assume that the
cost of debt is 10%, cost of common
stock 13.50%, cost of retained
earnings 12%. What is the cost of
debt marginal weight?
68.18
50.20
60.89
Compute for the market value of the
following securities: Debt - 10,000 @
1150 Preferred stock - 55,000 @ 65
Common Stock 78,500 @ 65. The
common stock compose of 30%
retained earnings
18, 246,750
18, 246,000
18, 224, 750
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