Question
$5.00 weighted averages
- From Business: Finance , Business: Management
- Closed, but you can still post tutorials
- Due on Feb. 12, 2012
- Asked on Feb 12, 2012 at 6:29:42PM
Q:
The following are balance sheets for the Genatron Manufacturing
Corporation for the years 2010 and 2011:
BALANCE SHEET 2010 2011
Cash $50,000 $40,000
Accounts receivable 200,000 260,000
Inventory 450,000 500,000
Total current assets 700,000 800,000
Fixed assets (net) 300,000 400,000
Total assets $1,000,000 $1,200,000
Bank loan, 10% $ 90,000 $ 90,000
Accounts payable 130,000 170,000
Accruals 50,000 70,000
Total current liabilities $270,000 $330,000
Long-term debt, 12% 300,000 400,000
Common stock, $10 par 300,000 300,000
Capital surplus 50,000 50,000
Retained earnings 80,000 120,000
Total liabilities and equity $1,000,000 $1,200,000
a. Calculate the weighted average cost of capital based on book
value weights. Assume an after-tax cost of new debt of 8.63
percent and a cost of common equity of 16.5 percent.
$5.00
Finance grad solution
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- Posted on Feb 12, 2012 at 9:12:48PM
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A:
Preview: ... t + 90,000 bank loan)
WACC for 2011: 8.63% ...
The full tutorial is about 37 words long .