O Te KR VEIDIKE DIELLI Based in Winnipeg, Manitoba, Defence Electronics Inc. (DE) was founded to provide security systems, facilities controls and related services El established a sold reputation for quality and the business grew thanks to strong relationships with large, long-term customers in Canada and the United States The Research and Innovation Group (RC) is the development side of the company. They are considering a new contract that will strain resources for not orly RG, but the entire company. With an upfront cost of $12.0 millon managers understand that the cost of capital will be a key part of maintaining and improving Clearview's competitive edge. You have been asked to calindate the company's weighted average cost of capital (WACC), based on the following information H Over the last five years the annual dividends on the firm's common stock have grown at 4.00 percent per year and this growth is expected to continue indefinitely. A common share dividend of 51.520 per share was recently pa Common shares trade at $83.000 per share. The company has authorized 545,000 common shares, with 460,000 common shares issued and outstanding The company has issued 99,000 of the 109,000 preferred shares authorized The annual preferred share dividend is $1.720 per share. The latest preferred share price is $23.200 per share DEI has an outstanding bond issue, payable semi-annually, that originally had a Que Ste At Form P koske mai PR To there Shere At 3456 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 21 Tub H D 1.00 percent G 1.00 percent F: 8: 1.00 percent 1.00 percent F: Requirements: A. Find market values of outstanding bonds, preferred shares and common shares: 1. Bonds: a. What is the market value of each bond? (Enter your answer to two decimal places. (e.g. $12.34)) b. What is the total market value of bonds at Dec 31, 2020 (Round your answer to whole numbers. For example, 51,234,000 not $1.234 million.) 2. Preferred shares: What is the total market value of preferred shares at Dec 31, 2020 (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million.) 3. Common shares: What is the total market value of common shares at Dec 31, 2020 (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million) B. What weights are assigned to debt, preferred shares and common equity on Dec 31, 2020 (Round all your answers to two decimal places. If you want to enter the number 12.34%, 1.24. lect.(3.133.4) mand damat antre the nation Debt Dentarend M N $1.00 $1 $1 $1 1.00 percent 1.00 SE 20 A1 25 26 27 28 29 30 31 32 33 34 35 36 37 38 * 85% 39 40 41 42 43 July Home M A 9. D best Fame y Dram Av C D (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million.) 3. Common shares: What is the total market value of common shares at Dec 31, 2020 (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million) B. What weights are assigned to debt, preferred shares and common equity on Dec 31, 2020 (Round all your answers to two decimal places. If you want to enter the number 12.34% for example, enter 12.34 (not 0.1234) and do not enter the percent sign.) C. Calculate the after-tax cost of the various components of WACC: (Round all your answers to two decimal places. If you want to enter the number 12.34% 1. Bonds a. What is the nominal yield-to-maturity? b. What is the effective yield-to-maturity? c. Calculate the after-tax cost of new debt (using the effective yield-to-maturity). 2. Preferred shares: 3. Common equity in the form of retained earnings: GA Debt Preferred Common M @Dane tetep M N $1 1.00 percent 1.00 percent 1.00 percent 1.00 percent 1.00 percent 1.00 percent 1.00 percent 1.00 percent At 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 to Hmman A G D Lay 2. Preferred shares: 3. Common equity in the form of retained earnings: 4. Common equity in the form of new shares: D. What is the weighted Average Cost of Capital if: (Round all your answers to two decimal places. If you want to enter the number 12.34% 1. the company uses new debt, new preferred shares and just retained earnings? Debt Pref Common 2. the company uses new debt, new preferred shares and new common shares? Debt A Sporting p Mark A Ag B B H w Weights 1.00 2.00 3.00 Weights 1.00 After-tax Cost 4.00 5.00 6.00 WACC After-tax Cost 4.00 pwe M Share Comm N 1.00 percent 1.00 percent 1.00 percent 7.00 percent 8.00 percent 9.00 percent 10.00 percent 7.00 A1 55 56 57 58 59 60 61 62 63 64 SETSSRANG 65 66 67 68 69 70 71 72 73 Da V www by (Fagsto F Hodiny B D E H 2. the company uses new debt, new preferred shares and new common shares? Debt Pref Common E. How much of the new capital projects can be funded without using new shareholders? (Enter your answer in whole numbers. For example, $1,234,000 not $1.234 million.) 102 Pa tom Deveti EV Weights 1.00 2.00 3.00 After-tax Cost 4.00 5.00 6.00 WACC M 7.00 8.00 9.00 10.00 percent $1 X Cut Calibri 14 Copy Format Painter Clipboard Font C perence clectronics Inc. (f information appears to be missing, change the row height to see it.) 3 Based in Winnipeg, Manitoba, Defence Electronics Inc. (DEI) was founded to provide security systems, facilities controls and related services. DEI established a solid reputation for quality and the business grew thanks to strong relationships with large, long-term customers in Canada and the United States. 13 The Research and Innovation Group (RIG) is the development side of the company. They are considering a new contract that will strain resources for not only RIG, but the entire company. With an upfront cost of $12.0 million, managers understand that the cost of capital will be a key part of maintaining and improving Clearview's competitive edge. You have been asked to calculate the company's weighted average cost of capital (WACC), based on the following information. 17 Over the last five years the annual dividends on the firm's common stock have grown at 4.00 percent per year and this growth is expected to continue indefinitely. A common share dividend of $1.520 per share was recently paid. Common shares trade at $83.000 per share. The company has authorized 545,000 common shares, with 469,000 common shares issued and outstanding. 21 The company has issued 99,000 of the 109,000 preferred shares authorized. The annual preferred share dividend is $1.720 per share. The latest preferred share price is $23.200 per share. DEI has an outstanding bond issue, payable semi-annually, that originally had a Quertion Cheat Anneer het portion calodations O Alignment $ Number H Styles O Te KR VEIDIKE DIELLI Based in Winnipeg, Manitoba, Defence Electronics Inc. (DE) was founded to provide security systems, facilities controls and related services El established a sold reputation for quality and the business grew thanks to strong relationships with large, long-term customers in Canada and the United States The Research and Innovation Group (RC) is the development side of the company. They are considering a new contract that will strain resources for not orly RG, but the entire company. With an upfront cost of $12.0 millon managers understand that the cost of capital will be a key part of maintaining and improving Clearview's competitive edge. You have been asked to calindate the company's weighted average cost of capital (WACC), based on the following information H Over the last five years the annual dividends on the firm's common stock have grown at 4.00 percent per year and this growth is expected to continue indefinitely. A common share dividend of 51.520 per share was recently pa Common shares trade at $83.000 per share. The company has authorized 545,000 common shares, with 460,000 common shares issued and outstanding The company has issued 99,000 of the 109,000 preferred shares authorized The annual preferred share dividend is $1.720 per share. The latest preferred share price is $23.200 per share DEI has an outstanding bond issue, payable semi-annually, that originally had a Que Ste At Form P koske mai PR To there Shere At 3456 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 21 Tub H D 1.00 percent G 1.00 percent F: 8: 1.00 percent 1.00 percent F: Requirements: A. Find market values of outstanding bonds, preferred shares and common shares: 1. Bonds: a. What is the market value of each bond? (Enter your answer to two decimal places. (e.g. $12.34)) b. What is the total market value of bonds at Dec 31, 2020 (Round your answer to whole numbers. For example, 51,234,000 not $1.234 million.) 2. Preferred shares: What is the total market value of preferred shares at Dec 31, 2020 (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million.) 3. Common shares: What is the total market value of common shares at Dec 31, 2020 (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million) B. What weights are assigned to debt, preferred shares and common equity on Dec 31, 2020 (Round all your answers to two decimal places. If you want to enter the number 12.34%, 1.24. lect.(3.133.4) mand damat antre the nation Debt Dentarend M N $1.00 $1 $1 $1 1.00 percent 1.00 SE 20 A1 25 26 27 28 29 30 31 32 33 34 35 36 37 38 * 85% 39 40 41 42 43 July Home M A 9. D best Fame y Dram Av C D (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million.) 3. Common shares: What is the total market value of common shares at Dec 31, 2020 (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million) B. What weights are assigned to debt, preferred shares and common equity on Dec 31, 2020 (Round all your answers to two decimal places. If you want to enter the number 12.34% for example, enter 12.34 (not 0.1234) and do not enter the percent sign.) C. Calculate the after-tax cost of the various components of WACC: (Round all your answers to two decimal places. If you want to enter the number 12.34% 1. Bonds a. What is the nominal yield-to-maturity? b. What is the effective yield-to-maturity? c. Calculate the after-tax cost of new debt (using the effective yield-to-maturity). 2. Preferred shares: 3. Common equity in the form of retained earnings: GA Debt Preferred Common M @Dane tetep M N $1 1.00 percent 1.00 percent 1.00 percent 1.00 percent 1.00 percent 1.00 percent 1.00 percent 1.00 percent At 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 to Hmman A G D Lay 2. Preferred shares: 3. Common equity in the form of retained earnings: 4. Common equity in the form of new shares: D. What is the weighted Average Cost of Capital if: (Round all your answers to two decimal places. If you want to enter the number 12.34% 1. the company uses new debt, new preferred shares and just retained earnings? Debt Pref Common 2. the company uses new debt, new preferred shares and new common shares? Debt A Sporting p Mark A Ag B B H w Weights 1.00 2.00 3.00 Weights 1.00 After-tax Cost 4.00 5.00 6.00 WACC After-tax Cost 4.00 pwe M Share Comm N 1.00 percent 1.00 percent 1.00 percent 7.00 percent 8.00 percent 9.00 percent 10.00 percent 7.00 A1 55 56 57 58 59 60 61 62 63 64 SETSSRANG 65 66 67 68 69 70 71 72 73 Da V www by (Fagsto F Hodiny B D E H 2. the company uses new debt, new preferred shares and new common shares? Debt Pref Common E. How much of the new capital projects can be funded without using new shareholders? (Enter your answer in whole numbers. For example, $1,234,000 not $1.234 million.) 102 Pa tom Deveti EV Weights 1.00 2.00 3.00 After-tax Cost 4.00 5.00 6.00 WACC M 7.00 8.00 9.00 10.00 percent $1 X Cut Calibri 14 Copy Format Painter Clipboard Font C perence clectronics Inc. (f information appears to be missing, change the row height to see it.) 3 Based in Winnipeg, Manitoba, Defence Electronics Inc. (DEI) was founded to provide security systems, facilities controls and related services. DEI established a solid reputation for quality and the business grew thanks to strong relationships with large, long-term customers in Canada and the United States. 13 The Research and Innovation Group (RIG) is the development side of the company. They are considering a new contract that will strain resources for not only RIG, but the entire company. With an upfront cost of $12.0 million, managers understand that the cost of capital will be a key part of maintaining and improving Clearview's competitive edge. You have been asked to calculate the company's weighted average cost of capital (WACC), based on the following information. 17 Over the last five years the annual dividends on the firm's common stock have grown at 4.00 percent per year and this growth is expected to continue indefinitely. A common share dividend of $1.520 per share was recently paid. Common shares trade at $83.000 per share. The company has authorized 545,000 common shares, with 469,000 common shares issued and outstanding. 21 The company has issued 99,000 of the 109,000 preferred shares authorized. The annual preferred share dividend is $1.720 per share. The latest preferred share price is $23.200 per share. DEI has an outstanding bond issue, payable semi-annually, that originally had a Quertion Cheat Anneer het portion calodations O Alignment $ Number H Styles