The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows:€ 76,60063,000€ 139,600Cash and marketable securitiesShort-term debtAccounts payableCurrent liabilities€2,500121,000Accounts receivableInventory126,000€ 249,500213,00046,000Current assetsProperty, plant, and equipmentDeferred taxesLong-term debt209,600Shareholders' equityOther assets88,000247,300€ 596,500€ 596,500TotalTotalThe debt has just been refinanced at an interest rate of 3.50% (short term) and 5.50% (long term). The expected rate of return on thecompany's shares is 12.50%. There are 7.56 million shares outstanding, and the shares are trading at €56. The tax rate is 25%.Calculate this company's weighed-average cost of capital. (Do not round intermediate calculations. Enter your answer as a percentrounded to 2 decimal places.)Weighed-average cost of capital

It is given that,Long term debts are €209,600 thousand.Short-term debts are €76,600 thousand.There…

Answered: The simplified balance sheet for the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows: € 76,500 Cash and marketable securities Short-term debt € 2,400 120,900 Accounts payable Accounts receivable 62,900 € 139,400 Current liabilities Inventory 125,900 € 249, 200 Current assets Property, plant, and equipment Deferred taxes 212,900 45,900 88,100 Long-term debt 209,500 Shareholders' equity Other assets 247, 200 € 596,100 € 596,100 Total Total The debt has an interest rate of 3.75% (short term) and 5.75% (long term). The expected rate of return on the company's shares is 12.75%. There are 7.55 million shares outstanding, and the shares are trading at €55. The tax rate is 25%. Assume the company issues €50 million in new equity and uses the proceeds to retire long-term debt. Also assume the company's borrowing rates are unchanged and the short-term debt is permanent. Use the three-step procedure. a. Calculate the cost of equity after the capital restructuring. (Do…
The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows: Cash and marketable 2,200 € Short-term debt € 76,300 securities Accounts receivable 120,700 Accounts payable 62,700 € 139,000 Inventory 125,700 € 248,600 Current liabilities Current assets Property, plant, and equipment 212,700 Long-term debt 209,300 Deferred taxes 45,700 88,300 Other assets Shareholders' equity 247,000 Total € 595,300 € 595,300 Total The debt has just been refinanced at an interest rate of 4.25% (short term) and 6.25% (long term). The expected rate of return on the company's shares is 13.25%. There are 7.53 million shares outstanding, and the shares are trading at €53. The tax rate is 25%. Calculate this company's weighed-average cost of capital. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Weighed-average cost of capital
The comparative balance sheets for Metlock Corporation show the following information. December 312020 2019Cash $33,500 $12,900Accounts receivable 12,400 10,000Inventory 12,100 9,000Available-for-sale debt investments –0– 3,000Buildings –0– 29,800Equipment 44,800 19,900Patents 5,000 6,300 $107,800 $90,900Allowance for doubtful accounts $3,100 $4,500Accumulated depreciation—equipment 2,000 4,500Accumulated depreciation—building –0– 6,000Accounts payable 5,000 3,000Dividends payable –0– 4,900Notes payable, short-term (nontrade) 3,000 4,100Long-term notes payable 31,000 25,000Common stock 43,000 33,000Retained earnings 20,700 5,900 $107,800 $90,900 Additional data related to 2020 are as follows. 1. Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500.2. $10,000 of the long-term note payable was paid by issuing common stock.3. Cash dividends paid were $4,900.4. On January…
The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows: Cash and marketable securities € 2,700 Short-term debt € 76,800 Accounts receivable 121,200 Accounts payable 63,200 Inventory 126,200 Current liabilities € 140,000 Current assets € 250,100 Property, plant, and equipment 213,200 Long-term debt 209,800 Deferred taxes 46,200 Other assets 87,800 Shareholders' equity 247,500 Total € 597,300 Total € 597,300 The debt has an interest rate of 6.50% (short term) and 8.50% (long term). The expected rate of return on the company's shares is 15.50%. There are 7.58 million shares outstanding, and the shares are trading at €44. The tax rate is 25%. Assume the company issues €50 million in new equity and uses the proceeds to retire long-term debt. Also assume the company's borrowing rates are unchanged and the short-term debt is permanent. Use the…
The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows: Cash and marketable securities € 3,200 Short-term debt € 77,300 Accounts receivable 121,700 Accounts payable 63,700 Inventory 126,700 Current liabilities € 141,000 Current assets € 251,600 Property, plant, and equipment 213,700 Long-term debt 210,300 Deferred taxes 46,700 Other assets 87,300 Shareholders' equity 248,000 Total € 599,300 Total € 599,300 The debt has just been refinanced at an interest rate of 7.75% (short term) and 9.75% (long term). The expected rate of return on the company's shares is 16.75%. There are 7.63 million shares outstanding, and the shares are trading at €39. The tax rate is 25%.Calculate this company's weighed-average cost of capital. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
The following information is to be used in answering the following question: TT Exports (TTE)Manufacturing's foreign subsidiary has the following balance sheet: Cash, marketable securities Accounts receivable Inventory (at market. Fixed Assets Total assets FC 250,000 1,000,000 2,700,000 5,100,000 ----------------- FC 9,050,000 Current liabilities Long-term debt Equity Total liabilities plus equity FC 750,000 3,400,000 4,900,000 --------------- FC 9,050,000 Suppose the FC appreciates from $0.70 to $0.75 during the period. Under the current rate method, what is TTEs translation gain (loss)? a. a loss of $192,000 b. a loss of $12,000 c. a gain of $294,000 d. a gain of $245,000
ABC Industry and Trade Inc. Balance Sheet as of 31.12.2020 (TL) transactions ASSETS(Assets) I-Current Assets Ready Values Securities Commercial debts Stocks Other Current Assets Current Assets Total I-Fixed Assets Financial Fixed Assets Tangible Fixed Assets Total Fixed Assets TOTAL ASSETS 31.12.2020 Amount Vertical Percent (%) 360.000 12 45.000 1.5 870.000 29 840.000 28 255.000 8.5 2.370.000 79 390.000 13 240.000 8. 630.000 21 3.000.000 100 LIABILITIES(RESOURCES) l-Short Term Liv. resources Financial Debts Trade payables Short Term Foreign Resource Total Il-Long-Term Liabilities Financial Debts Long Term Liv. Source Ball. III-Equity Paid-in capital Profit Reserves Net profit for the period Previous Year's profit Total Equity TOTAL LIABILITIES (RESOURCES) 39.000 1.3 120.000 4 159.000 5.3 81.000 2.7 81.000 2.7 120.000 4 420.000 14 1.950.000 65 270.000 9 2.760.000 92 3.000.000 100 Requested: Calculate the vertical percentages of the Balance Sheet items of ABC Sanayi ve Ticaret A.Ş. dated…
Pax Limited showed the following assets and liabilities in its financial statements at 31 December 2018. DETAILS CARRYING AMOUNT FAIR VALUE PPE 10,000,000 14,000,000 Inventory 4,200,000 4,400,000 Long Term Loans (3,500,000) (3,500,000) Account Payable (2,500,000) (2,500,000) 8,200,000 12,400,000 The current market rate for similar transactions is 8.5% per annum. Chelsea Limited planned to acquire all the assets and liabilities of Pax Limited on 1 July 2018 and agreed to pay R13,400,000 in cash on 1 July 2019 in full settlement of the acquisition. Required: Calculate the purchase consideration. Calculate the goodwill or bargain purchase for this transaction. Prepare the journal entries required in the books of Chelsea Limited relating to this transaction.
Kramer Company's trading debt investments portfolio is as follows: Catlett Corp. Lyman, Inc. OGOO Cost €250,000 245,000 A. €0. B. €30,000 Loss. C. €10,000 Gain. D. €10,000 Loss. €495,000 December 31, 2022 Fair Value €200,000 265,000 €465,000 Unrealized Gain (Loss) ? ? What amount should be reported as a loss or gain in Kramer's 2022 income statement, if the old balance of unrealized gain or loss in the previous year december 31, 2021 was €40,000 loss? ?
Consider this simplified balance sheet for Geomorph Trading: Current assets Long-term assets $ 110 510 Net working capital $ 620 a. Debt-equity ratio b Long-term debt-to-capital ratio C. d. Current ratio a. What is the company's debt-equity ratio? (Round your answer to 2 decimal places.) b. What is the ratio of total long-term debt to total long-term capital? (Round your answer to 2 decimal places.) c. What is its net working capital? d. What is its current ratio? (Round your answer to 2 decimal places.) Current liabilities Long-term debt Other liabilities Equity $ 65 275 80 200 $ 620
The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 20Y9 and 20Y8, is:Dec. 31, 20Y9 Dec. 31, 20Y8AssetsCash $70,720 $47,940Accounts receivable (net) 207,230 188,190Inventories 298,520 289,850Investments 0 102,000Land 295,800 0Equipment 438,600 358,020Accumulated depreciation—equipment (99,110) (84,320)Total assets $1,211,760 $901,680Liabilities and Stockholders' EquityAccounts payable (merchandise creditors) $205,700 $194,140Accrued expenses payable (operating expenses) 30,600 26,860Dividends payable 25,500 20,400Common stock, $1 par 202,000 102,000Paid-in capital: Excess of issue price over par—common stock 354,000 204,000Retained earnings 393,960 354,280Total liabilities and stockholders' equity $1,211,760 $901,680The income statement for the year ended December 31, 20Y9, is as follows:Sales $2,023,898Cost of goods sold 1,245,476Gross profit $778,422Operating expenses:Depreciation expense $14,790Other operating expenses 517,299Total operating expenses 532,089Operating…
XYZ provided the following financial information: XYZBalance SheetAs of 12/31/19 Assets: Liabilities and Equity: Cash and marketable securities $27,476 Accounts payable and accruals $154,860 Accounts receivable $143,519 Short-term notes payable $21,255 Inventory $212,379 Total current liabilities $176,115 Total current assets $383,374 Long term debt $155,510 Net plant and equipment $602,704 Total liabilities $331,625 Goodwill and other assets $42,422 Common stock $312,719 Retained earnings $384,156 Total assets $1,028,500 Total liabilities and equity $1,028,500 In addition, it was reported that the firm had a net income of: $158,402 and net sales of: $4,272,431 Calculate the following ratios for this firm (Use 365 days for calculation. Round answers to 2 decimal places, e.g. 52.75.): Current Ratio ? times…

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS