1. Analyze the Financial Statements of Pettijohn Inc. and calculate the metric 125 in table below. (1 Mark) 2. Analyze the metrics and comment on financial health of the organization ( 500 words minimum). (5 Marks) 3. Assume the expected return is 10%, risk free rate is 2%, market risk is 4%. What is Pettijohn's Beta? (1 Mark) 4. What does this beta mean? Do you want the beta to increase or decrease? ( 200 words minimum) ( 2 Marks) 5. Assume the $10,920 Long-Term Bond matures in 15 years with interest and principal to be paid at the end. At the current rate of 6.25% What is the value of the debt at maturity? (1 Marks) Industry \begin{tabular}{|c|c|c|} \hline \begin{tabular}{l} Pettijohn Inc. \\ Balance Sheet (Millions of \$) \end{tabular} & 2017 & 2016 \\ \hline \multicolumn{3}{|l|}{ Assets } \\ \hline Cash and securities & 244 & 390 \\ \hline Accounts receivable & 7,530 & 6,940 \\ \hline Inventories & 10,980 & 9,570 \\ \hline Total current assets & 18,754 & 16,900 \\ \hline Net plant and equipment & 17,990 & 18,230 \\ \hline Total assets & 36,744 & 35,130 \\ \hline \multicolumn{3}{|l|}{ Liabilities and Equity } \\ \hline Accounts payable & 6,990 & 6,850 \\ \hline Notes payable & 5,320 & 5,900 \\ \hline Accruals & 4,120 & 3,900 \\ \hline Total current liabilities & 16,430 & 16,650 \\ \hline Long-term bonds & 10,920 & 10,920 \\ \hline Total debt & 27,350 & 27,570 \\ \hline Common stock & 3,360 & 3,360 \\ \hline Retained earnings & 6,034 & 4,200 \\ \hline Total common equity & 9,394 & 7,560 \\ \hline \multirow[t]{2}{*}{ Total liabilities and equity } & 36,744 & 35,130 \\ \hline & - & - \\ \hline Income Statement (Millions of \$) & 2017 & \\ \hline Net sales & 51,561 & \\ \hline Operating costs except depr'n & 47,252 & \\ \hline Depreciation & 980 & \\ \hline Earnings before interest and taxes (EBIT) & 3,329 & \\ \hline Less interest & 508 & \\ \hline Earnings before taxes (EBT) & 2,821 & \\ \hline Taxes & 987 & \\ \hline Net income & 1,834 & \\ \hline \multicolumn{3}{|l|}{ Other data: } \\ \hline Shares outstanding (millions) & 175.00 & \\ \hline Common dividends (millions) & 825.15 & \\ \hline Interest rate on notes payable \& L-T bonds & 6.25% & \\ \hline Federal plus state income tax rate & 0.35 & \\ \hline Year-end stock price & 55.00 & \\ \hline Tax rate & 35.00% & \\ \hline WACC & 10.00% & \\ \hline \end{tabular}