Question
Balance Sheet General Talc Mines December 31, 2014 Assets Liabilities and stockholders' Cash. . . . . . . . . . . . .
Balance Sheet General Talc Mines December 31, 2014 Assets Liabilities and stockholders' Cash. . . . . . . . . . . . . . . . . . . 25,000 Equity accounts payable. . . . . . . . . . . . . . . . . . . . . 80,000 Accounts receivable. . . . . . . . 120,000 Notes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000 Inventories. . . . . . . . . . . . . . . 300,000 Accruals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 Total current assets. . . . . . . 445,000 Total current liabilities. . . . . . . . . . . . . . . . . . . . 480,000 Net fixed assets. . . . . . . . . . . 500,000 Long-term debts (150 bonds issued at $1,000 par). . . 150,000 Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 630,000 Stockholders' equity Common stock (7,200 shares outstanding). . . . . . . . 180,000 Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . 135,000 Total Stockholders' equity. . . . . . . . . . . . . . . . . . 315,000 Total assets. . . . . . . . . . . . $945,000 Total liabilities and stockholders' equity. . . . . . . . . $945,000 General Talc Mines has compiled the following data regarding the market value and cost of the specific sources of capital.
Source of capital After tax cost
long term debt 8%
COmmon stock equity 19
Market price per share of common stock $50 Market value of longminusterm debt $980 per bond The weighted average cost of capital using market value weights is ________. (See Table 9.3) 15.8 percent 17.5 percent 11.7 percent 13.5 percent
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