Free AICPA AICPA-CPA Exam Questions

The target capital structure of Cerberus Co. is 50% debt, 10% preferred equity, and 40% common equity. The interest rate on debt is 8%, the yield on the preferred is 10%, the cost of common equity is 12%, and the tax rate is 40%. Cerberus does not anticipate issuing any new stock. What is Cerberus' weighted-average cost of capital?

The price elasticity of demand for widgets is 1.1 and the quantity demanded is 5,000 units. The price increases by 8%. What is the new quantity demanded?

The price elasticity of demand for widgets is 1.1 and the quantity demanded is 5,000 units. The price increases by 8%. What is the new quantity demanded?

Adams, Beck, and Carr organized Flexo Corp. with authorized voting common stock of $100,000. Adams received 10% of the capital stock in payment for the organizational services that he rendered for the benefit of the newly formed corporation. Adams did not contribute property to Flexo and was under no obligation to be paid by Beck or Carr. Beck and Carr transferred property in exchange for stock below. What amount of gain did Carr recognize from this transaction? Adjusted Basis / Fair Market Value / % of Flexo Stock Acquired Beck: $5,000 $20,000 20% Carr: $60,000 $70,000 70%

At 30 June 20X5 a company’s allowance for receivables was $39,000. At 30 June 20X6 trade receivables totalled $517,000. It was decided to write off debts totalling $37,000 and to adjust the allowance for receivables to the equivalent of 5% of the trade receivables based on past events. What figure should appear in the statement of profit or loss for the year ended 30 June 20X6 for receivables expense?