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Calculate Paulson's WACC using market-value weights. Round your answer to two decimal places. Do not round your intermediate calculations.

Calculate Paulson's WACC using market-value weights. Round your answer to two decimal places. Do not round your intermediate calculations.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Excel Online Structured Activity: WACC The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 11%, and its marginal tax rate is 40%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,117. The firm has 576 shares of common stock outstanding that sell for $4.00 per share. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet Calculate Paulson's WACC using market-value weights. Round your answer to two decimal places. Do not round your intermediate calculations. Liabilities And Equity Cash Total assets Assets Accounts receivable Inventories Plant and equipment, net 2,160 % $ 120 240 360 $2,880 Accounts payable and accruals Short-term debt Long-term debt Common equity Total liabilities and equity $ 10 57 $1,060 1,753 $2,880
Transcribed Image Text:Excel Online Structured Activity: WACC The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 11%, and its marginal tax rate is 40%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,117. The firm has 576 shares of common stock outstanding that sell for $4.00 per share. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet Calculate Paulson's WACC using market-value weights. Round your answer to two decimal places. Do not round your intermediate calculations. Liabilities And Equity Cash Total assets Assets Accounts receivable Inventories Plant and equipment, net 2,160 % $ 120 240 360 $2,880 Accounts payable and accruals Short-term debt Long-term debt Common equity Total liabilities and equity $ 10 57 $1,060 1,753 $2,880
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