Question
Construct a pie chart of the firms capital structure (market values) and calculate the Weighted average cost of capital assuming the following data: a. Market
Construct a pie chart of the firms capital structure (market values) and calculate the Weighted average cost of capital assuming the following data:
a. Market Value of Equity: 100B
b. Beta: 1.2
c. Expected Return on the market: 9%
d. Risk Free rate: 1.8%
e. Assume a marginal tax rate of 35%
f. Market Value of Debt: 40B
g. Current yield on Debt: 8%
| Balance sheet |
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| (USD in millions) |
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| YearEnd2017 |
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| Assets |
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| Liabilities |
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| Current Assets |
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| Current Liabilities |
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| Short term debt | $ 3,897.00 |
| Cash & Cash equivalents |
| $ 6,877.00 |
| Non-current liabilities |
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| Short term investments |
| $ 53,539.00 |
| Long term debt | $ 21,457.00 |
| Total current assets |
| $ 60,416.00 |
| Total liabilities | $ 25,354.00 |
| Non-current assets |
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| Stockholders equity |
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| Gross property, plant & equip |
| $ 12,427.00 |
| Common Stock | $ 22,340.00 |
| Accumulated Depreciation |
| $ (9,095.00) |
| Retained Earnings | $ 16,054.00 |
| Total non-current assets |
| $ 3,332.00 |
| Total stockholders equity | $ 38,394.00 |
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| Total Assets |
| $ 63,748.00 |
| Total liab & stockholders equity | $ 63,748.00 |
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| Income Statements | 2013 | 2014 | 2015 | 2016 | 2017 |
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| Revenue | $ $ 43,218.00 | $ 46,061.00 | $ 48,607.00 | $ 47,142.00 | $49,161.00 |
| Cost of revenue | $(16,682.00) | $(17,852.00) | $(19,167.00) | $(19,373.00) | $(19,480.00) |
| Gross profit | $ 26,536.00 | $ 28,209.00 | $ 29,440.00 | $ 27,769.00 | $ 29,681.00 |
| Research & Development | $ (5,823.00) | $ (5,488.00) | $ (5,942.00) | $ (6,294.00) | $ (6,207.00) |
| Sales, General & Admin. | $(11,720.00) | $(11,969.00) | $(11,802.00) | $(11,437.00) | $(11,861.00) |
| Restructuring,merger&acqui | $ (799.00) | $ (304.00) | $ (105.00) | $ (418.00) | $ (484.00) |
| Operating income | $ 8,194.00 | $ 10,448.00 | $ 11,591.00 | $ 9,620.00 | $ 11,129.00 |
| Interest Expense | $ (628.00) | $ (596.00) | $ (583.00) | $ (564.00) | $ (566.00) |
| Income before taxes | $ 7,566.00 | $ 9,852.00 | $ 11,008.00 | $ 9,056.00 | $ 10,563.00 |
| Provision for income taxes | $ (1,335.00) | $ (2,118.00) | $ (1,244.00) | $ (1,862.00) | $ (2,220.00) |
| Net income | $ 6,231.00 | $ 7,734.00 | $ 9,764.00 | $ 7,194.00 | $ 8,343.00 |
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The Access Audit Handbook An Inclusive Approach To Auditing Buildings
Authors: Centre For Accessible Environments
3rd Edition
1914124839, 978-1914124839
