4 pts Question 7 You will use these financial statements and additional data to answer questions 7-8 (2 questions) ASSETS Cash Marketable securities Accounts receivable Inventories Total current assets Net fixed assets Total assets Callipyplan, Inc Balance Sheet December 31 $ milions) 2015 2014 2015 2014 UABILITIES & STOCKHOLDERS' EQUITY $ 60 $ 7.0 Accounts payable $ 188 $ 14.7 3.5 50 Notes payable 662 332 233 2 2013 Accrued expenses 77.7 620 1339 118.8 Total current liabilities $ 162.7 5 1099 $ 376.6 5 3341 Long-term debt 744 702 2038 157.0 Otheriong-term liabilities 196 17.7 $ 5804 S 5011 Total liabilities 5 256 7 $ 1978 Common stock 554 55.4 Retained earnings 2683 2479 Total common equity S 323.7 S 3033 abilities and stockholders' equity $ 5804 $ 5011 Callipygian, Inc. Income Statement For the Year Ended December 31 (5 millions) 2015 2014 Sales $ 546.9 $ 485.8 Cost of goods sold 286,3 247.3 1R Salla naladministrative an Callipygian, Inc. Income Statement For the Year Ended December 31 ($ millions) 2015 2014 Sales $ 546.9 $ 485.8 Cost of goods sold 286.3 247.3 Selling, general, & administrative exp. 1862 180.5 Depreciation and amortization 22.7 20.1 Earnings before interest and taxes (EBIT) 517 S 37.9 Interest expense 7.7 8.0 Earnings before taxes $ 44,0 $29.9 Total income tax 17.6 11.9 Net income $ 26.4 $ 18.0 Additional information for Callipygian, Inc.: Tax rate = 40% Price per share on 12/31/15 = $68.25 Shared outstanding on 12/31/15 = 7,35 million Yield to maturity on bonds on 12/31/15 = 6.4% Yield on 10 year U.S. Treasures on 12/31/15 = 2.0% Stock's beta = 1.4 Bonds outstanding on 12/31/15 = 97,000 Bond price on 12/31/15 = 99% of par Using the financial statements and additional information for Callipygian, Inc., calculate free cash flow for 2015 Bonds outstanding on 12/31/15 =97,000 Bond price on 12/31/15 = 99% of par Using the financial statements and additional information for Callipygian, Inc., calculate free cash flow for 2015. -$15,23 million 0-$29.98 million -$42.73 million $18.57 million 4 pts Question 8 You will use these financial statements and additional data to answer questions 7-8 (2 questions) Using the financial statements and additional information for Callipygian, Inc., as well as your answer to question 7 (if needed), calculate the firm's weighted average cost of capital (WACC) at the end of 2015. Assume the CAPM holds and Market Risk Premium is 6%. 0.0935 or 9.35% 0.0675 or 6.75% 0.0255 or 2.55% 0.0795 or 7.95%