The following items were taken from the financial statements from London Company at December 31, 2015 Accounts Investments in bonds Share capital-ordinary Current tax payable Investments in capital shares Retained earnings Land Bonds payable (due 2025) Notes payable (short term) Buildings Accounts payable Accumulated Depreciation Buildings Accumulated Depreciation--Equipment Equipment Trading securities Franchise Patent Inventories Allowance for doubtful accounts Cash Accounts receivable 299.000 1000,000 500,000 277,000 500,000 260,000 500,000 1000,000 1.040,000 276.000 352,000 60,000 600,000 153,000 160,000 195.000 597,000 25.000 197,000 435.000 Instructions Prepare a classified balance sheet as of December 31, 2015 Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at 10% interest rate, and its common stock currently pays a $2 dividend per share. The stock's price is currently $20; its dividend is expected to grow at a constant rate of 5 percent per year; its tax rate is 35 percent; and its WACC is 12 percent. 1. Calculate the cost of debt and the cost of common stock. 2. What percentage of the company's capital structure consists of debt? 4: XYZ company expects in the coming year: sales of 40,000 units at $10 per unit, variable operating costs of $4 per unit, fixed operating costs of $30,000, interest of $50,000, and preferred stock dividends of $24,000. The Company is in the 40% tax bracket. 1. Compute XYZ company's Degree of Total Leverage (DTL) and explain its meaning. 2. If XYZ company's Earnings Per Share (EPS) is currently $7.2, estimate its EPS in case of a 10% increase in sales revenue. Peil