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Please help with the answer to this question. Thank you. Estimating Market and Book Values and Cost of Capital Measures The December 31, 2007, partial

Please help with the answer to this question. Thank you.

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Estimating Market and Book Values and Cost of Capital Measures The December 31, 2007, partial balance sheet and the 2007 retained earnings statement from Colgate-Palmolive Company (CL) follow ($ millions, except per share amounts). The website Finance.yahoo.com reported that the total market capitalization of Colgate-Palmolive was $38.53 billion and its stock price was 575.69 as of December 31, 2007. Also, Yahoo estimates its total enterprise value at $42.49 billion, and its market beta at 0.46. In addition, Colgate-Palmolive's average pretax borrowing cost is 5.20%, and its marginal tax rate is 35%. Assume that the risk-free rate equals 5.20% and the market premium equals 5.60% $ 155.9 138.1 1,066.8 Liabilities and Shareholders' Equity Notes and loans payable Current portion of long-term debt Accounts payable Accrued income taxes Other accruals Total current liabilities Long-term debt Deferred income taxes Other liabilities Total liabilities Shareholders' Equity Preferred stock Common stock, S1 par value (1,000,000,000 shareauthorized, 732,853,180 shares issued) Additional paid-in capital Retained earnings Accumulated other comprehensive income 262.7 1,539.2 3,162.7 3,171.9 264.1 1,177.1 7,775.8 197.5 732.9 1,517.7 10,627.5 (1.666.B) 11,408.8 (218.9) (8,903.7) 2,286.2 $10,062.0 Unearned compensation Treasury stack, at cost Total shareholders equity Total liabilities and shareholders' equity Common Shares Outstanding Balance, December 31, 2005 512,658,587 Shares issued for stock options 10,051,559 Treasury stock acquired 118,062,892) Other 4,387,547 Balance, December 31, 2007 509,034,801 (a) Verify Yahoo's computation of Colgate-Palmolive's market capitalization using the data from its financial report excerpts above. (Round your answer to two decimal places.) Market capitalization = $ 0 x x 509,034,801 shares = $ 0 x billion (b) Compute the book value of Colgate-Palmolive's long-term debt as of December 31, 2007. $ 0 * million (c) Compute the market value of Colgate-Palmolive's debt using the data from Yahoo. (Round your answer to two decimal places.) $ 0 x billion yes e (d) Identify reasons behind the difference between the amounts computed in parts (b) and (c). (Select all that apply.) Yahoo.Finance.com might include other liabilities, such as lease obligations, in the calculation of debt. no . The market value of debt doesn't include the issuing of new treasury stock. yes. The market price of Colgate-Palmolive's debt changed in value on December 31, 2007. yes - The market value and book value of debt differs due to accounting usage of historical cost, (e) Compute Colgate-Palmolive's cost of debt capital. (Round your answer to one decimal place.) 0 X % (f) Compute Colgate-Palmolive's cost of equity capital. (Round your answer to one decimal place.) 0 X % (g) Using your rounded answer from (e) and (f) above, compute Colgate-Palmolive's weighted average cost of capital. Use the market capitalization from Ycharts.com and your rounded answer from (C) above for this calculation (Do not round until your final answer. Round answer to one decimal place.) 0 X % Estimating Market and Book Values and Cost of Capital Measures The December 31, 2007, partial balance sheet and the 2007 retained earnings statement from Colgate-Palmolive Company (CL) follow ($ millions, except per share amounts). The website Finance.yahoo.com reported that the total market capitalization of Colgate-Palmolive was $38.53 billion and its stock price was 575.69 as of December 31, 2007. Also, Yahoo estimates its total enterprise value at $42.49 billion, and its market beta at 0.46. In addition, Colgate-Palmolive's average pretax borrowing cost is 5.20%, and its marginal tax rate is 35%. Assume that the risk-free rate equals 5.20% and the market premium equals 5.60% $ 155.9 138.1 1,066.8 Liabilities and Shareholders' Equity Notes and loans payable Current portion of long-term debt Accounts payable Accrued income taxes Other accruals Total current liabilities Long-term debt Deferred income taxes Other liabilities Total liabilities Shareholders' Equity Preferred stock Common stock, S1 par value (1,000,000,000 shareauthorized, 732,853,180 shares issued) Additional paid-in capital Retained earnings Accumulated other comprehensive income 262.7 1,539.2 3,162.7 3,171.9 264.1 1,177.1 7,775.8 197.5 732.9 1,517.7 10,627.5 (1.666.B) 11,408.8 (218.9) (8,903.7) 2,286.2 $10,062.0 Unearned compensation Treasury stack, at cost Total shareholders equity Total liabilities and shareholders' equity Common Shares Outstanding Balance, December 31, 2005 512,658,587 Shares issued for stock options 10,051,559 Treasury stock acquired 118,062,892) Other 4,387,547 Balance, December 31, 2007 509,034,801 (a) Verify Yahoo's computation of Colgate-Palmolive's market capitalization using the data from its financial report excerpts above. (Round your answer to two decimal places.) Market capitalization = $ 0 x x 509,034,801 shares = $ 0 x billion (b) Compute the book value of Colgate-Palmolive's long-term debt as of December 31, 2007. $ 0 * million (c) Compute the market value of Colgate-Palmolive's debt using the data from Yahoo. (Round your answer to two decimal places.) $ 0 x billion yes e (d) Identify reasons behind the difference between the amounts computed in parts (b) and (c). (Select all that apply.) Yahoo.Finance.com might include other liabilities, such as lease obligations, in the calculation of debt. no . The market value of debt doesn't include the issuing of new treasury stock. yes. The market price of Colgate-Palmolive's debt changed in value on December 31, 2007. yes - The market value and book value of debt differs due to accounting usage of historical cost, (e) Compute Colgate-Palmolive's cost of debt capital. (Round your answer to one decimal place.) 0 X % (f) Compute Colgate-Palmolive's cost of equity capital. (Round your answer to one decimal place.) 0 X % (g) Using your rounded answer from (e) and (f) above, compute Colgate-Palmolive's weighted average cost of capital. Use the market capitalization from Ycharts.com and your rounded answer from (C) above for this calculation (Do not round until your final answer. Round answer to one decimal place.) 0 X %

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