Background:

XYZ Corporation is a multinational company operating in the consumer goods sector. The company manufactures and sells a variety of products, including electronics, home appliances, and personal care items. The company is currently evaluating its financial performance and considering strategic decisions to enhance shareholder value.

Financial Information:

Weighted Average Cost of Capital $($WACC$)$:

Cost of Debt: $4\mathrm{.}5\%$

Cost of Equity: $10\%$

Weight of Debt: $40\%$

Weight of Equity: $60\%$

Tax Rate: $25\%$

Working Capital Management:

Current Assets:

Cash: $$20$ million

Accounts Receivable: $$50$ million

Inventory: $$30$ million

Current Liabilities:

Accounts Payable: $$25$ million

Short$-$term Debt: $$15$ million

Operating Income: $$80$ million

Interest Expense: $$10$ million

Sales: $$200$ million

Additional Information:

The company has $10$ million shares outstanding.

Market price per share: $$15.$

Instructions:

Calculate the Weighted Average Cost of Capital $($WACC$)$ for XYZ Corporation.

Determine the net working capital.

Compute the degree of operating leverage $($DOL$),$ degree of financial leverage $($DFL$),$ and degree of combined leverage $($DCL$)$ for the company.

Analyze and provide insights based on the calculated values, considering how these financial metrics impact the company's overall financial health and decision$-$making processes.