The writer is very fast, professional and responded to the review request fast also. Thank you.
9. The following are balance sheets for the Genatron ManufacturingCorporation for the years 2010 and 2011:BALANCE SHEET 2010 2011Cash $50,000 $40,000Accounts receivable 200,000 260,000Inventory 450,000 500,000Total current assets 700,000 800,000Fixed assets (net) 300,000 400,000Total assets $1,000,000 $1,200,000Bank loan, 10% $ 90,000 $ 90,000Accounts payable 130,000 170,000Accruals 50,000 70,000Total current liabilities $270,000 $330,000Long-term debt, 12% 300,000 400,000Common stock, $10 par 300,000 300,000Capital surplus 50,000 50,000Retained earnings 80,000 120,000Total liabilities and equity $1,000,000 $1,200,000a. Calculate the weighted average cost of capital based on bookvalue weights. Assume an after-tax cost of new debt of 8.63percent and a cost of common equity of 16.5 percent.b. The current market value of Genatron’s long-term debt is$350,000. The common stock price is $20 per share and thereare 30,000 shares outstanding. Calculate the WACC usingmarket value weights and the component capital costs in (a).c. Recalculate the WACC based on both book value and marketvalue weights assuming that the before-tax cost of debt will be18 percent, the company is in the 40 percent income tax bracket,and the after-tax cost of common equity capital is 21 percent.
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more