Complete the excel.

INCOME STATEMENT 1 Sales 2 COGS 3 Depreciation expense 4 Total operating costs 5 EBIT 6 Less interest 7 Earnings before taxes (EBT) 8 Taxes (40%) 11 Net Income 12 Shares of common equity 13 Dividends per share 14 Dividends to common 15 Additions to retained earnings Actual 2016 $ 7,500.00 $ 5,625.00 375.00 6,000.00 1,500.00 63.00 1,437.00 574.80 862.20 62.50 $ 2.50 $ 156.25 $ 705.95 Actual 2016 30.00 543.75 787.50 1,361.25 1,350.00 2,711.25 BALANCE SHEET ASSETS 1 Cash 2 Short-term investments 3 Accounts receivable 4 Inventories 5 Total Current Assets 6 Net plant & equipment 7 Total Assets LIABILITIES & EQUITY 8 Accounts payable 9 Accruals 10 Notes payable 11 Total current liabilities 12 Long-term bonds 13 Total liabilities 15 Common stock 16 Retained earnings 17 Total common equity 18 Total liabilities & equity 187.50 262.50 155.00 605.00 525.00 1,130.00 643.75 937.50 1,581.25 2,711.25 $ $ $ Optimal Capital Structure % Financed with Debt 0% 20% 30% EBIT, Last year's EBIT Shares Outstanding (no) = P. - stock price T = Tax rate rge = risk-free rate RP = market risk premium r = cost of equity Equity Beta, BL- Taxes (35%) $4,000,000 400,000 $40.00 40.0% 3.5% 8.00% 13.50% 1.25 0.0% 7.0% 7.5% 9.0% 11.5% 40% 50% OPTIMAL DEBT LEVEL 16 points Calculate the cost of Equity at each debt level. DIS = D/E Equity Beta BL W 0% 20% 30% 40% 50% 5 points Free cash flow (FCF) = 6 points 5 points wa WACC 0% 20% 30% 40% 50% RECAPITALIZATION PROCESS 20 points First, find the debt at each capital structure. O O wa DVD 0% 20% 30% 40% 50% Before Debt Issue (1) After Debt Issue, But Before Repurchase 1 (2) After Repurchase (3) V. + ST investments Vietal - Debt Value of equity (S) Number of shares Price per share = 400,000 - (5,174,286/47.62) 5 points Value of stock + Cash distributed in repurchase Wealth of shareholders 5 points 5 points 5 points