QUESTION ASSETS Cash Accounts Receivable Inventory Property, plant & equipment Total Assets Notes 1. 2. 3. 4.
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ASSETS Cash Accounts Receivable Inventory Property, plant & equipment Total Assets Notes 1. 2. 3. 4. Hawthorn Manufacturing Company Ltd Balance Sheet as at 31/12/19 6. 150 200 640 1.120 2.110 LIABILITIES Accounts payable Bank loan (interest only) Mortgage Loan Corporate bonds The market risk premium is 10%. Total liabilities SHAREHOLDERS' EQUITY Ordinary shares Preference Shares Notes. 123 45 Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 5. The preference shares have a par value of $1 each and are shown on the Balance Sheet at their par value. They pay a constant dividend of $000 and they are currently trading for $1,02. 130 200 500 310 1.140 The interest rate on the bank loan is 8,2% p.a. The interest rate on the mortgage loan is 5,2% p.a. The corporate bonds have a credit rating of AAA and have 2 years to maturity. They make semi-annual coupon payments at a coupon rate of 5% p.a. 450 230 290 970 2.110 The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1,9. They have just paid a dividend of $000. The dividend is expected to grow at a rate of 9% p.a. for the next 3 years, and after that it will grow at a constant rate of 3% p.a. in perpetuity. ASSETS Cash Accounts Receivable Inventory Property, plant & equipment Total Assets Notes 1. 2. 3. 4. Hawthorn Manufacturing Company Ltd Balance Sheet as at 31/12/19 6. 150 200 640 1.120 2.110 LIABILITIES Accounts payable Bank loan (interest only) Mortgage Loan Corporate bonds The market risk premium is 10%. Total liabilities SHAREHOLDERS' EQUITY Ordinary shares Preference Shares Notes. 123 45 Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 5. The preference shares have a par value of $1 each and are shown on the Balance Sheet at their par value. They pay a constant dividend of $000 and they are currently trading for $1,02. 130 200 500 310 1.140 The interest rate on the bank loan is 8,2% p.a. The interest rate on the mortgage loan is 5,2% p.a. The corporate bonds have a credit rating of AAA and have 2 years to maturity. They make semi-annual coupon payments at a coupon rate of 5% p.a. 450 230 290 970 2.110 The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1,9. They have just paid a dividend of $000. The dividend is expected to grow at a rate of 9% p.a. for the next 3 years, and after that it will grow at a constant rate of 3% p.a. in perpetuity.
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Answer To calculate the Weighted Average Cost of Capital WACC for Hawthorn Manufacturing Company Ltd we first need to determine the cost of each sourc... View the full answer
Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
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