Stargel Inc. percentages, except for per-share amounts: For the Years Ended December 31, 20Y2 and 20Y1 Comparative Income Statement 20Υ2 20Υ1 Sales $10,000,000 $9,400,000 Cost of goods sold. Gross profit. Selling expenses 5,350,000 4,950,000 $ 4,650,000 $ 2,000,000 $4,450,000 $1,880,000 Administrative expenses. Total operating expenses Income from operations Other revenue... 1,500,000 $ 3,500,000 $ 1,150,000 1,410,000 $3,290,000 $1,160,000 150,000 140,000 $ 1,300,000 $1,300,000 Other expense (interest) Income before income tax 170,000 150,000 $1,150,000 $ 1,130,000 Income tax expense 230,000 225,000 $ 925,000 Net income $ 900,000 Stargel Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Assets Current assets: Cash $ 500,000 $ 400,000 Marketable securities.. 1,010,000 1,000,000 Accounts receivable (net) 740,000 510,000 Inventories 1,190,000 950,000 Prepaid expenses Total current assets.. 250,000 229,000 $3,690,000 $3,089,000 Long-term investments.. Property, plant, and equipment (net) Total assets 2,350,000 2,300,000 3,740,000 3,366,000 $9,780,000 $8,755,000 Liabilities Current liabilities. $ 900,000 $ 880,000 Long-term liabilities: Mortgage note payable, 10%.. Bonds payable, 10%.. $ 200,000 2$ 01 1,500,000 1,500,000 $1,700,000 Total long-term liabilities Total liabilities $1,500,000 $2,600,000 $2,380,000 Stockholders' Equity Preferred $0.90 stock, $10 par. Common stock, $5 par. $ 500,000 $ 500,000 500,000 500,000 Retained earnings. Total stockholders' equity. 6,180,000 5,375,000 $6,375,000 $8,755,000 $7,180,000 Total liabilities and stockholders' equity. $9,780,000 Instructions ctermine the following measures for 20Y2, rounding to one decimal place including

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I answred question 1 below butneed help with question 2. I've included my answer to question 1 since it is needed to do question 2. 1. We calculated the market value of equity on Sangria's balance sheet by multiplying its current stock price ($7.50) by 100 million, the number of its outstanding shares. The company's future prospects are good, so the stock is trading above book value ($7.50 vs. $5.00 per share). However, interest rates have been stable since the firm's debt was issued and the book and market values of debt are in this case equal.  Sangria's cost of debt (the market interest rate on its existing debt and on any new borrowing) is 6%. Its cost of equity (the expected rate of return demanded by investors in Sangria's stock) is 12.4%.  The market-value balance sheet shows assets worth $1,250 million. Of course we can't observe this value directly, because the assets themselves are not traded. But we know what they are worth to debt and equity investors ($500 + 750 = $1,250…