If a Firm Has Total Long-Term Capital of $1,000,000,preferred Stock

question 18

Multiple Choice

If a firm has total long-term capital of $1,000,000,preferred stock of $500,000,preferred dividends of $10 and preferred stock price of $100,the weighted cost of capital is:

• A)50%
• B)10%
• C)5%
• D)cannot tell from this information

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Definitions:

Authority

Authority refers to the legal power or right given to an individual or body to make decisions, enforce rules, or control something or someone.

Employer's Organization

A group that represents the interests of employers in various industries.

Ratify

To officially approve or confirm, often used in the context of validating agreements or contracts.

Actual Authority

The power that an agent or representative has been formally given by a principal to conduct specific acts.