3. A corporation’s capital structure is composed of common stock and preferred stock. If the percentage of common stock is three times the percentage of preferred stock in the capital structure, the percentage of common stock minus the percentage of preferred stock in the capital structure is equal to ?
To find the answer, we need to set up a system of equations based on the given information. Let's assume that the percentage of preferred stock in the capital structure is x.
According to the problem, the percentage of common stock in the capital structure is three times the percentage of preferred stock. So, the percentage of common stock is 3x.
The sum of these percentages should equal 100 since we're dealing with a percentage composition. Therefore, we have:
x + 3x = 100
4x = 100
x = 100/4
x = 25
Now, we know that the percentage of preferred stock is 25%, and the percentage of common stock is three times this value, which is 3 * 25 = 75%.
To find the difference between these percentages, we subtract the percentage of preferred stock from the percentage of common stock:
75% - 25% = 50%
So, the answer is 50%. The percentage of common stock minus the percentage of preferred stock in the capital structure is 50%.