Question

Raymond Co. has $3.9 million of debt, $2 million of preferred stock, and $3.3 million of common equity. What would be its weight on common equity? 0.20 0.36 0.24 0.42

Answer 1

Answer:Weight of common Equity=0.36

Explanation:

Total  Shareholders amount= Debt+ Preferred stock+common Equity  

=3.9+2.0 +3.3 = 9.2 million    

Weight of common Equity is therefore  = Common Equity / Total Shareholders Fund

Weight of common Equity = 3.3millon/ 9.2million

=0.358

=0.36