The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows: € 76,600 63,000 € 139,600 Cash and marketable securities Short-term debt Accounts payable Current liabilities € 2,500 121,000 Accounts receivable Inventory 126,000 € 249,500 213,000 46,000 Current assets Property, plant, and equipment Deferred taxes Long-term debt 209,600 Shareholders' equity Other assets 88,000 247,300 € 596,500 € 596,500 Total Total The 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 the company'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 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: € 76,600 63,000 € 139,600 Cash and marketable securities Short-term debt Accounts payable Current liabilities € 2,500 121,000 Accounts receivable Inventory 126,000 € 249,500 213,000 46,000 Current assets Property, plant, and equipment Deferred taxes Long-term debt 209,600 Shareholders' equity Other assets 88,000 247,300 € 596,500 € 596,500 Total Total The 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 the company'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 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
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Transcribed Image Text:The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows:
€ 76,600
63,000
€ 139,600
Cash and marketable securities
Short-term debt
Accounts payable
Current liabilities
€
2,500
121,000
Accounts receivable
Inventory
126,000
€ 249,500
213,000
46,000
Current assets
Property, plant, and equipment
Deferred taxes
Long-term debt
209,600
Shareholders' equity
Other assets
88,000
247,300
€ 596,500
€ 596,500
Total
Total
The 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 the
company'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 percent
rounded to 2 decimal places.)
Weighed-average cost of capital
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