Excel Online Structured Activity: WACC The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 9%, and its marginal tax rate is 40% Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,173 The firm has 576 shares of common stock outstanding that sell for $4.00 per share. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. XEE Open spreadsheet Calculate Paulson's WACC using market value weights. Round your answer to two decimal places. Do not round your intermediate calculations. Assets Cash $ 120 Liabilities And Equity Accounts payable and $ 10 accruals Short-term debt Long-term debt $1,130 Common equity Accounts receivable 240 360 Inventories Plant and equipment, net 2,160 1.697 Open spreadsheet Calculate Paulson's WACC using market value weights. Round your answer to two decimal places. Do not round your intermediate calculations Assets Liabilities And Equity Cash $ 120 Accounts payable and accruals Accounts receivable Short-term debt 240 360 Inventories $1,130 Plant and equipment, net 2,160 Long-term debt Common equity Total liabilities and 1,697 Total assets $2,880 $2.880 equity 1 WACC 3 4 Cost of common equity (0) Before tax cost of debt (ra) Marginal tax rate U Common shares outstanding Current stock price Long-term debt sells at par value 18.00% 9.00% 40.00% 576 $4.00 Yes 6 8 10 11 Balance Sheet: Assets 12 Cash Account receivable Inventories Plant and equipment, net Total assets $120.00 $240.00 $360.00 $2,160.00 $2.880.00 Liabilities and Equity Accounts payable and accruals Short-term debt Long-term debt Common equity Total liabilities and equity $10.00 $43.00 $1,130.00 $1,697.00 $2.880.00 19 Market value of total debt 20 Market value of common equity 21 Total capital Formulas #N/A #N/A #N/A 23 Percentage of debt 24. Percentage of common equity #N/A #N/A Sheet1 534 10 Balance Sheet: 11 Assets 12 Cash 13 Account receivable 14 Inventories 15 Plant and equipment, net 16 Total assets 17 18 19 Market value of total debt 20 Market value of common equity Total capital $120.00 $240.00 $360.00 $2,160.00 $2,880.00 Liabilities and Equity Accounts payable and accruals Short-term debt Long-term debt Common equity Total liabilities and equity $10.00 $43.00 $1,130.00 $1,697.00 $2.880.00 Formulas #N/A #N/A #N/A Percentage of debt 24 Percentage of common equity #N/A #N/A #N/A 26 After-tax cost of debt Weighted Average Cost of Capital (WACC) Sho+1
