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 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
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
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Question
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F74a306ae-1d6f-4f57-b9d2-2c6dadfb14ef%2F42e02a70-1b66-4b24-92b7-17233cdf1ab2%2Fb66j91l.jpeg&w=3840&q=75)
Transcribed Image Text: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
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