Hi, I was just wondering if you could check the current working out for questions 1 and 2. It has been previously stated that the value of debt was only long-term + short-term debt as well. The market value of equity was calculated by $114.33 (current share price) x shares outstanding. The text in red is a guide given to us.

1. With the help of the Excel spread sheet provided, compute the market debt to equity (D/E) ratio for BOX. Then use it to find the current cost of equity (rE) and the pretax- WACC for BOX. Assuming the cost of unlevered equity (rU) is 12%.
2. At present Liam is considering the following share repurchase proposal from the firm's CFO: the company could raise $12 billion new debt (on permanent basis) at a competitive rate of 3.25% to repurchase shares. Compute the new market D/E ratio, rE, and the weighted average cost of capital of BOX in this scenario.

Balance Sheet (000s) Period Ending: 31/12/18 Current Assets Perfet capital markets Cash and Cash Equivalents 2,239,900 Net Receivables 1,929,200 01 02 Inventory 14,402,700 Initial with New Debt Other Current Assets 1,320,800 Value of debt 000s 22,356,100.00 34,356, 100.00 Total Current Assets 19,892,600 Mkt value of Equity 000s 144,956,834.70 144,956,834.70 Long Term Assets Total (sum of the above two) 147,312,934.70 179,312,934.70 Fixed Assets 29,536,000 Debt/Equity ratio ).15 0.24 Intangible assets 1,758,900 Debt/Asset ratio (Asset=market value of assets] 0.43 0.66 Other Assets 742,300 Equity/Asset ratio (Asset=market value of assets) 0.23 2.79 Total Assets 51,929,800 rU (pre-tax) 0.12 0.12 rD 3.25% 3.25% Liabilities & stock holders' Equity: rE 0. 1308 0.141 Accounts Payable 12,314,900 WACC (only consider tax rate, not ITS) .12 0.1202 Short Term Debt/Current Portion of Long Term Debt 426,400 Other Current Liabilities 1,908,400 Total Current Liabilities 14,649,700 Working Out Q1 Long Term Debt 21,929,700 Value of Debt = (426,400 + 21,929,700) Other Liabilities 2,397,200 Mkt Value of Equity = (1,267,881 x 114.33) Deferred Liability Charges 834,600 Total = (426,400 + 21,929,700) + (1,267,881 x 114.33) Total Liabilities 39,811,200 Debt/Equity ratio = 22,356,100/144,956,834.70 Stock Holders Equity 12,118,600 Debt/Asset ratio = 22,356, 100/51,929,800 Total Liabilities & Shareholders' Equity 51,929,800 Equity/Asset ratio = 12,118,600/51,929,800 FU (pre-tax) = Stated in question rD = 3.25% (below) rE = 0.12 + 0.15(0.12 - 0.0483)* pre-tax WACC = Same as ru Working Out Q2 Value of Debt = (426,400 + 21,929,700 + 12,000,000) Market Value of Debt = 144,956,834.70 Total = (34,356,100 + 144,956,834.70) Debt/Equity Ratio = 34,356,100 / 144,956,834.70 Debt/ Asset Ratio = 34,356,100 / 51,929,800 Equity/ Asset Ratio = 144,956,834.70 / 51,929,800 rU = 0.12 (stays the same) D = 0.0325 (stays the same) TE = 0.12 + 0.24 (0.12 - 0.0325) pre-tax WACC = [(144,956,834.70/179,312,934.70) x 0.141] + [(34,356,100/179,312,934.70) x 0.0325]