Question

Does equity refer to preferred or common stock?

Does equity refer to preferred or common stock?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Preferred stock pays a predetermined dividend. In case of liquidation, preference stockholders have priority in receiving payment.

Common stock represents ownership in an organization. It also grants the stockholders voting rights. They vote on corporate policy and the board of directors of the company. The dividends paid to common stockholders vary with them not receiving a dividend for some periods. In case of liquidation, common stockholders are last in priority in receiving their money back.

Equity refers to common stock.

In case of any query, kindly comment on the solution.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The firm's target capital structure is the mix of debt, preferred stock, and common equity the...
The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained earnings is used in the firm's WACC calculation. However, if...
which is true concerning preferred stock? A. preferred stock is considered equity on the company balance...
which is true concerning preferred stock? A. preferred stock is considered equity on the company balance sheet b. preferred stock holders have voting rights for the company board of directors C. preferred stock payments are variable like common stock d. preferred stock is viewed as more risky by investors than a firm's common stock
Preferred stock has characteristics of both debt and common stock. Which characteristics of preferred stock resemble...
Preferred stock has characteristics of both debt and common stock. Which characteristics of preferred stock resemble that of common stock? Group of answer choices Preferred and common dividends are not tax deductible expenses; preferred and common stock both carry voting rights Preferred and common stock both carry voting rights; preferred and common dividends are equally stable and are at management’s discretion Preferred and common stock are classified as a Liability on balance sheet; preferred and common dividends are not tax...
Dividends for Preferred and Common Stock The Stockholders' Equity category of Greenbaum Company's balance sheet as...
Dividends for Preferred and Common Stock The Stockholders' Equity category of Greenbaum Company's balance sheet as of December 31, 2017, appeared as follows: Preferred stock, $100 par, 9%    2,000 shares issued and outstanding $200,000 Common stock, $10 par   40,000 shares issued and outstanding 400,000 Additional paid-in capital 500,000 Total contributed capital $1,100,000 Retained earnings 900,000     Total stockholders' equity $2,000,000 The notes to the financial statements indicate that dividends were not declared or paid for 2015 or 2016. Greenbaum...
A firm has a​ long-term debt of $54,000​ common equity of $94,000​, and preferred stock of...
A firm has a​ long-term debt of $54,000​ common equity of $94,000​, and preferred stock of $16,000. What is its current capital​ structure? If debt costs 10.1 % pretax, preferred stock costs 12 % and equity costs 15.2 % what is the WACC​ (assuming a 40% tax​ rate)? A The total value of the capital is B The weight of the debt component is C The weight of the preferred stock component is D The weight of the equity component...
Preferred stock is similar to common stock in the following way; a. both preferred stock and...
Preferred stock is similar to common stock in the following way; a. both preferred stock and common stock provide equal periodic dividends. b. both investments have a final maturity value set by the issuing agreement. c. both contain a dividend growth factor. d. as equity, both are subordinate to bondholders in the event of bankruptcy.
Percent of capital structure:    Debt 35 % Preferred stock 20 Common equity 45    Additional...
Percent of capital structure:    Debt 35 % Preferred stock 20 Common equity 45    Additional information:   Bond coupon rate 11% Bond yield to maturity 9% Dividend, expected common $ 5.00 Dividend, preferred $ 12.00 Price, common $ 60.00 Price, preferred $ 120.00 Flotation cost, preferred $ 3.80 Growth rate 8% Corporate tax rate 40% Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. Weighted Cost Debt= Preferred stock= Common equity=...
Book Value for Preferred and Common Stock The stockholders' equity section of Plaka Corporation's balance sheet...
Book Value for Preferred and Common Stock The stockholders' equity section of Plaka Corporation's balance sheet follows. Contributed capital: Preferred stock, $100 par value, callable at $105 per share, 6 percent cumulative, 5,000 shares authorized, 100 shares issued and outstanding $10,000 Common stock, $5 par value, 50,000 shares authorized, 5,000 shares issued, 4,500 shares outstanding 25,000 Additional paid-in capital 14,000 Total contributed capital $49,000 Retained earnings 47,500 Total contributed capital and retained earnings $96,500 Less treasury stock, common (500 shares...
Given the following information: Percent of capital structure: Preferred stock 20 % Common equity 40 Debt...
Given the following information: Percent of capital structure: Preferred stock 20 % Common equity 40 Debt 40 Additional information: Corporate tax rate 34 % Dividend, preferred $ 8.50 Dividend, expected common $ 2.50 Price, preferred $ 105.00 Growth rate 7 % Bond yield 9.5 % Flotation cost, preferred $ 3.60 Price, common $ 75.00 Calculate the weighted average cost of capital for Digital Processing Inc. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal...
1. Why would the cost of common equity be greater than that of preferred equity of...
1. Why would the cost of common equity be greater than that of preferred equity of the same company? 2. Explain how a company can force conversion in a callable convertible preferred stock issue?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT