just help a brother outYou were recently named the Head of Corporate Development for Company X. Company X has a February 28 fiscal year end and needs to report its 2021 annual financial results. You have been asked to help in that regard and were given the following information: .

Revenue = $4.0 billion Accounts Receivable = $2.0 billion (2020); $2.4 billion (2021) .

Salary - Receptionists (salary paid to receptionists at all X locations) = $36.0 million Inventory = $1.6 billion (2020); $1.8 billion (2021) Raw Materials = $1.295 billion Accounts Payable = $1.75 billion (2020); $1.925 billion (2021) Patent = X patented a particular production process three years ago; the resulting 20-year patent is valued at $527.5 million. . Utility Expense (heat for customer waiting rooms in all X locations) = $190.0 million . Salary - Assembly-Line Labor = $1.25 billion . Stock-Based Compensation = $200.0 million Capital Expenditures = $200.0 million . Interest Expense = $25 million Corporate Tax Rate = 21.0% The CEO also told you that the CFO has been having trouble calculating Company Xs Weighted Average Cost of Capital. The only information you have been provided is the following: Long-Term Debt: Book Value = $500 million; Market Value = $500 million. . Preferred Stock: Book Value = $100 million, Market Value = $90 million; Dividend Rate = 8.0%. . Common Stock: 15,250,000 shares; Market Price = $32.50 per share. . U.S. Treasury Bond Rate = 3.0%. . Expected return from the stock market = 11.5%. Market Sensitivity: Company X is very sensitive to the market's overall movements. For example, if the market is up 10%, the stock price of Company X's common stock increases by 15%. Given that it is the end of its 2021 fiscal year, Company X needs to decide what to do with its $15 million of excess cash flow.

The company has identified the following corporate projects (all up-front costs are paid at Year 0):

Years 1 2 3 4 5 0.0 0.0 0.0 15,180,704.1 0.0 0.0 0.0 0.0 27,636,527.7 Project Up-front Cost A 10,000,000.0 B 15,000,000.0 C 7,000,000.0 D 3,000,000.0 E 12,000,000.0 8,750,000.0 0.0 0.0 0.0 0.0 6,034,071.6 0.0 0.0 18,013,483.5 QUESTIONS The CEO has asked you to address the following items by 11:00 pm Saturday night. 1. Construct the Income Statement for X.

2. Cost of Capital for X:

A. What is the after-tax Cost of Debt? B. What is the Cost of Preferred Stock?

C. What is the Cost of Equity? What is the Weighted Average Cost of Capital?

D. 3. A. Corporate Projects: Which corporate projects, if any, should X pursue with its excess cash flow?

B. If X has any excess cash flow remaining after investing in the projects you identified in the prior question, what should it do with the excess? C. If it turns out that X generated only $2 million of excess cash flow, what, if anything, should it do with the money?

4. Unlevered Free Cash Flow: A. B. How much was X's Net Working Capital in 2020 and 2021? What was the Change in Net Working Capital from 2020 to 2021? How much Unlevered Free Cash Flow did X generate during its 2021 fiscal year?

c. 5. Taxation: A. If X paid out the entire $15 million of excess cash flow as a dividend, and if the average individual income tax rate for X's shareholders is 30.0%, how much will the shareholders in total receive after-tax? B. How would your answer change if X was a Limited Liability Company? 6. Bonds: A. Company X is planning to issue $250 million of 10-year bonds at the prevailing interest rate of 7.5%. What will the market value of the bonds be if one day after issuance interest rates increase to 8.25%?

You were recently named the Head of Corporate Development for Company X. Company X has a February 28 fiscal year end and needs to report its 2021 annual financial results. You have been asked to help in that regard and were given the following information: . Revenue = $4.0 billion Accounts Receivable = $2.0 billion (2020); $2.4 billion (2021) . Salary - Receptionists (salary paid to receptionists at all X locations) = $36.0 million Inventory = $1.6 billion (2020); $1.8 billion (2021) Raw Materials = $1.295 billion Accounts Payable = $1.75 billion (2020); $1.925 billion (2021) Patent = X patented a particular production process three years ago; the resulting 20-year patent is valued at $527.5 million. . Utility Expense (heat for customer waiting rooms in all X locations) = $190.0 million . Salary - Assembly-Line Labor = $1.25 billion . Stock-Based Compensation = $200.0 million Capital Expenditures = $200.0 million . Interest Expense = $25 million Corporate Tax Rate = 21.0% The CEO also told you that the CFO has been having trouble calculating Company Xs Weighted Average Cost of Capital. The only information you have been provided is the following: Long-Term Debt: Book Value = $500 million; Market Value = $500 million. . Preferred Stock: Book Value = $100 million, Market Value = $90 million; Dividend Rate = 8.0%. . Common Stock: 15,250,000 shares; Market Price = $32.50 per share. . U.S. Treasury Bond Rate = 3.0%. . Expected return from the stock market = 11.5%. Market Sensitivity: Company X is very sensitive to the market's overall movements. For example, if the market is up 10%, the stock price of Company X's common stock increases by 15%. Given that it is the end of its 2021 fiscal year, Company X needs to decide what to do with its $15 million of excess cash flow. The company has identified the following corporate projects (all up-front costs are paid at Year 0): Years 1 2 3 4 5 0.0 0.0 0.0 15,180,704.1 0.0 0.0 0.0 0.0 27,636,527.7 Project Up-front Cost A 10,000,000.0 B 15,000,000.0 C 7,000,000.0 D 3,000,000.0 E 12,000,000.0 8,750,000.0 0.0 0.0 0.0 0.0 6,034,071.6 0.0 0.0 18,013,483.5 QUESTIONS The CEO has asked you to address the following items by 11:00 pm Saturday night. 1. Construct the Income Statement for X. 2. Cost of Capital for X: A. What is the after-tax Cost of Debt? B. What is the Cost of Preferred Stock? C. What is the Cost of Equity? What is the Weighted Average Cost of Capital? D. 3. A. Corporate Projects: Which corporate projects, if any, should X pursue with its excess cash flow? B. If X has any excess cash flow remaining after investing in the projects you identified in the prior question, what should it do with the excess? C. If it turns out that X generated only $2 million of excess cash flow, what, if anything, should it do with the money? 4. Unlevered Free Cash Flow: A. B. How much was X's Net Working Capital in 2020 and 2021? What was the Change in Net Working Capital from 2020 to 2021? How much Unlevered Free Cash Flow did X generate during its 2021 fiscal year? c. 5. Taxation: A. If X paid out the entire $15 million of excess cash flow as a dividend, and if the average individual income tax rate for X's shareholders is 30.0%, how much will the shareholders in total receive after-tax? B. How would your answer change if X was a Limited Liability Company? 6. Bonds: A. Company X is planning to issue $250 million of 10-year bonds at the prevailing interest rate of 7.5%. What will the market value of the bonds be if one day after issuance interest rates increase to 8.25%? You were recently named the Head of Corporate Development for Company X. Company X has a February 28 fiscal year end and needs to report its 2021 annual financial results. You have been asked to help in that regard and were given the following information: . Revenue = $4.0 billion Accounts Receivable = $2.0 billion (2020); $2.4 billion (2021) . Salary - Receptionists (salary paid to receptionists at all X locations) = $36.0 million Inventory = $1.6 billion (2020); $1.8 billion (2021) Raw Materials = $1.295 billion Accounts Payable = $1.75 billion (2020); $1.925 billion (2021) Patent = X patented a particular production process three years ago; the resulting 20-year patent is valued at $527.5 million. . Utility Expense (heat for customer waiting rooms in all X locations) = $190.0 million . Salary - Assembly-Line Labor = $1.25 billion . Stock-Based Compensation = $200.0 million Capital Expenditures = $200.0 million . Interest Expense = $25 million Corporate Tax Rate = 21.0% The CEO also told you that the CFO has been having trouble calculating Company Xs Weighted Average Cost of Capital. The only information you have been provided is the following: Long-Term Debt: Book Value = $500 million; Market Value = $500 million. . Preferred Stock: Book Value = $100 million, Market Value = $90 million; Dividend Rate = 8.0%. . Common Stock: 15,250,000 shares; Market Price = $32.50 per share. . U.S. Treasury Bond Rate = 3.0%. . Expected return from the stock market = 11.5%. Market Sensitivity: Company X is very sensitive to the market's overall movements. For example, if the market is up 10%, the stock price of Company X's common stock increases by 15%. Given that it is the end of its 2021 fiscal year, Company X needs to decide what to do with its $15 million of excess cash flow. The company has identified the following corporate projects (all up-front costs are paid at Year 0): Years 1 2 3 4 5 0.0 0.0 0.0 15,180,704.1 0.0 0.0 0.0 0.0 27,636,527.7 Project Up-front Cost A 10,000,000.0 B 15,000,000.0 C 7,000,000.0 D 3,000,000.0 E 12,000,000.0 8,750,000.0 0.0 0.0 0.0 0.0 6,034,071.6 0.0 0.0 18,013,483.5 QUESTIONS The CEO has asked you to address the following items by 11:00 pm Saturday night. 1. Construct the Income Statement for X. 2. Cost of Capital for X: A. What is the after-tax Cost of Debt? B. What is the Cost of Preferred Stock? C. What is the Cost of Equity? What is the Weighted Average Cost of Capital? D. 3. A. Corporate Projects: Which corporate projects, if any, should X pursue with its excess cash flow? B. If X has any excess cash flow remaining after investing in the projects you identified in the prior question, what should it do with the excess? C. If it turns out that X generated only $2 million of excess cash flow, what, if anything, should it do with the money? 4. Unlevered Free Cash Flow: A. B. How much was X's Net Working Capital in 2020 and 2021? What was the Change in Net Working Capital from 2020 to 2021? How much Unlevered Free Cash Flow did X generate during its 2021 fiscal year? c. 5. Taxation: A. If X paid out the entire $15 million of excess cash flow as a dividend, and if the average individual income tax rate for X's shareholders is 30.0%, how much will the shareholders in total receive after-tax? B. How would your answer change if X was a Limited Liability Company? 6. Bonds: A. Company X is planning to issue $250 million of 10-year bonds at the prevailing interest rate of 7.5%. What will the market value of the bonds be if one day after issuance interest rates increase to 8.25%