show all excel formulas/ work answering the following: 
Chapter Case Cost of Capital for Layton Motors You have recently been hired by Layton Motors, Inc. (LMI), in its relatively new treasury management department. LMI was founded eight years ago by Rachel Layton, Rachel found a method to manufacture a cheaper battery that will hold a larger charge, giving a car powered by the battery a range of 700 miles before requiring a recharge. The cars manufactured by LMI are midsized and carry a price that allows the company to compete with other mainstream auto manufacturers. The company is privately owned by Rachel and her family, and it had sales of $197 million last year. year LMI primarily sells to customers who buy the cars online, although it does have a limited number of company-owned dealerships. The customer selects any customization and makes a deposit af 20 percent of the purchase price. After the order is taken the car is made to order, typically within 45 days. LMI's growth to date has come from its profits. When the company had sufficient capital, it would expand production. Relatively little formal analysis has been used in its capital budgeting process. Rachel has just read about capital budgeting techniques and has come to you for help. For starters, the company has never attempted to determine its cost of capital, and Rachel would like you to perform the analysis. Because the company is privately owned, it is cifficult to cetermine the cost of equity for the company, Rachel wants you to use the pure play approach to estimate the cost of capital for LMI, and she has chosen Tesla Motors as a representative company. The following questions will lead you through the steps to calculate this estimate. QUESTIONS 1. Most publicly traded corporations are required to submit quarterly (10-2) and annual (10-K) reports to the SEC detailing the financial operations of the company over the past quarter or year, respectively. These corporate filings are available on the SEC website at . Go to the SEC website and search for SEC filings mede by Tesla Motors (TSLA). Find the most recent 10-G or 10-K, and download the form. Look on the balance sheet to find the book value of debt and the book value of equity. 2. To estimate the cost of ecuity for TSL A go to and enter the ticker symbol TSLA. Follow the links to answer the following questions: What is the most recent stock price listed for TSLA? What is the market value of equity, or market capitalization? How many shares of stock does TSLA have outstanding? What is the most recent annual dividend? Can you use the clividend discount model in this case? What is the beta for TSLA? Now go back to fim.com and find the current U.S. Treasury bond rates. What is the yield on three-month Treasury bills? Using the historical market risk premium, what is the cost of equity for TSLA using CAPM? 3. You now need to calculate the cost of deb: for TSLA. Go tokets morningstar.com/ Bundcenter/, enter TSLA es the company, and find the yield to maturity for each of TSLA's bands. What is the weighted average cost of dent far TSLA using the book value weights and using the market value weights? Does it make a difference in this case if you use book value weights or market value weights? 4. You now have all the necessary information to calculate the weighted average cost of capital for TSLA. Calculate this using book value weights and market value weights. assurring TSLA has a 21 percent marginal tax rate. Which number is more relevant? 5. You used TSLA as a pure play company to estimate the cost of capital for LMI. Are there any potential problems with this approach in this situation? Chapter Case Cost of Capital for Layton Motors You have recently been hired by Layton Motors, Inc. (LMI), in its relatively new treasury management department. LMI was founded eight years ago by Rachel Layton, Rachel found a method to manufacture a cheaper battery that will hold a larger charge, giving a car powered by the battery a range of 700 miles before requiring a recharge. The cars manufactured by LMI are midsized and carry a price that allows the company to compete with other mainstream auto manufacturers. The company is privately owned by Rachel and her family, and it had sales of $197 million last year. year LMI primarily sells to customers who buy the cars online, although it does have a limited number of company-owned dealerships. The customer selects any customization and makes a deposit af 20 percent of the purchase price. After the order is taken the car is made to order, typically within 45 days. LMI's growth to date has come from its profits. When the company had sufficient capital, it would expand production. Relatively little formal analysis has been used in its capital budgeting process. Rachel has just read about capital budgeting techniques and has come to you for help. For starters, the company has never attempted to determine its cost of capital, and Rachel would like you to perform the analysis. Because the company is privately owned, it is cifficult to cetermine the cost of equity for the company, Rachel wants you to use the pure play approach to estimate the cost of capital for LMI, and she has chosen Tesla Motors as a representative company. The following questions will lead you through the steps to calculate this estimate. QUESTIONS 1. Most publicly traded corporations are required to submit quarterly (10-2) and annual (10-K) reports to the SEC detailing the financial operations of the company over the past quarter or year, respectively. These corporate filings are available on the SEC website at . Go to the SEC website and search for SEC filings mede by Tesla Motors (TSLA). Find the most recent 10-G or 10-K, and download the form. Look on the balance sheet to find the book value of debt and the book value of equity. 2. To estimate the cost of ecuity for TSL A go to and enter the ticker symbol TSLA. Follow the links to answer the following questions: What is the most recent stock price listed for TSLA? What is the market value of equity, or market capitalization? How many shares of stock does TSLA have outstanding? What is the most recent annual dividend? Can you use the clividend discount model in this case? What is the beta for TSLA? Now go back to fim.com and find the current U.S. Treasury bond rates. What is the yield on three-month Treasury bills? Using the historical market risk premium, what is the cost of equity for TSLA using CAPM? 3. You now need to calculate the cost of deb: for TSLA. Go tokets morningstar.com/ Bundcenter/, enter TSLA es the company, and find the yield to maturity for each of TSLA's bands. What is the weighted average cost of dent far TSLA using the book value weights and using the market value weights? Does it make a difference in this case if you use book value weights or market value weights? 4. You now have all the necessary information to calculate the weighted average cost of capital for TSLA. Calculate this using book value weights and market value weights. assurring TSLA has a 21 percent marginal tax rate. Which number is more relevant? 5. You used TSLA as a pure play company to estimate the cost of capital for LMI. Are there any potential problems with this approach in this situation
