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Fawaz Abdulaziz Alhokair Company reported the following balance sheet: Cash 14 Accounts payable 42 Receivables 70 Other current liabilities 28 Inventories 280 Total CL 70

Fawaz Abdulaziz Alhokair Company reported the following balance sheet:

Cash

14

Accounts payable

42

Receivables

70

Other current liabilities

28

Inventories

280

Total CL

70

Total CA

364

Long-term debt (20 bonds)

142

Net fixed assets

126

Common equity (100 shares outstanding)

278

Total assets

490

Total liab. and equity

490

1. The stock is currently selling for SAR 23 per share and there are 100 shares outstanding

2. Its bonds are 15-year bonds with 12%coupon rate paid annually and the face value of SAR 1,000. They are currenty selling at SAR 870

3. The required rate of return on its common stock is 11%.

4. Assume the firm's tax rate is 40%.

What is the WACC for AlHokair Company using Book value

weights?

a. The before tax cost of debt (rd) is ?% (use 2 decimals)

b. The weights of debt using book value ?% (use 2 decimals)

c. The cost of equity is ?% (use 2 decimals)

d. The WACC using the Book value weights is ?% (use 2 decimals)

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