$100.00 60 1.40 2.00% 9.75% 0.75% INPUT DATA Common Stock Information PO Common shares outstanding (000) Beta risk-free rate required return on market Flotation cost on new common stock Preferred Stock Information Pp Dp Preferred shares outstanding (000) Flotation cost on preferred stock Debt Information Total market value of debt ($000) Price of existing bond Number of years until maturity Annual coupon interest rate Face Value of Debt Flotation cost on debt $41.50 $3.75 15 1.25% $1,550 $1,375.50 23 10.50% $1,000.00 2% Tax rate 35.00% Debt a. What is the market value capital structure and the values for the w's in the WACC equation? Market Value Cap Structure Mkt Value (5000) Percentage (w) $1,550 18.97% Preferred Stock $623 7.62% Common Stock $6,000 73.42% Total Market Value $8,173 100.00% b. Calculate the cost of each capital component, that is, the before-tax cost of debt, the cost of preferred stock, and the cost of equity. Before-tax cost of debt Cost of preferred stock Cost of common stock 2.802% Use rate() function in excel 9.151% 12.850% c. If BLC continues to use the same market value capital structure, what is the firm's WACC? wdrd(1-1) + 0.3455% wp xrp 0.6970% WCS X res 9.4341% WACC 10.4766% INPUT DATA 2021 2022 7.0% 6.8% 86.0% 85.0% 5.0% 6.0% 5.0% 5.0% 6.0% 8.0% 3.25% 35.0% 60 From WACC Worksheet From WACC Worksheet 2023 6.0% 84.0% 6.0% 5.0% 7.5% 2024 6.0% 84.0% 6.0% 5.0% 7.0% Sales Growth Rate Non depreciation operating costs as a % of sales Growth in fixed assets Growth in NOWC Deprec as a % of Fixed Assets Long-run FCF growth (8) Tax Rate (T) Common Shares outstanding (000) WACC Market value of debt and preferred stk (5000) 2025 7.5% 83.0% 6.0% 5.0% 7.0% $100.00 60 1.40 2.00% 9.75% 0.75% INPUT DATA Common Stock Information PO Common shares outstanding (000) Beta risk-free rate required return on market Flotation cost on new common stock Preferred Stock Information Pp Dp Preferred shares outstanding (000) Flotation cost on preferred stock Debt Information Total market value of debt ($000) Price of existing bond Number of years until maturity Annual coupon interest rate Face Value of Debt Flotation cost on debt $41.50 $3.75 15 1.25% $1,550 $1,375.50 23 10.50% $1,000.00 2% Tax rate 35.00% Debt a. What is the market value capital structure and the values for the w's in the WACC equation? Market Value Cap Structure Mkt Value (5000) Percentage (w) $1,550 18.97% Preferred Stock $623 7.62% Common Stock $6,000 73.42% Total Market Value $8,173 100.00% b. Calculate the cost of each capital component, that is, the before-tax cost of debt, the cost of preferred stock, and the cost of equity. Before-tax cost of debt Cost of preferred stock Cost of common stock 2.802% Use rate() function in excel 9.151% 12.850% c. If BLC continues to use the same market value capital structure, what is the firm's WACC? wdrd(1-1) + 0.3455% wp xrp 0.6970% WCS X res 9.4341% WACC 10.4766% INPUT DATA 2021 2022 7.0% 6.8% 86.0% 85.0% 5.0% 6.0% 5.0% 5.0% 6.0% 8.0% 3.25% 35.0% 60 From WACC Worksheet From WACC Worksheet 2023 6.0% 84.0% 6.0% 5.0% 7.5% 2024 6.0% 84.0% 6.0% 5.0% 7.0% Sales Growth Rate Non depreciation operating costs as a % of sales Growth in fixed assets Growth in NOWC Deprec as a % of Fixed Assets Long-run FCF growth (8) Tax Rate (T) Common Shares outstanding (000) WACC Market value of debt and preferred stk (5000) 2025 7.5% 83.0% 6.0% 5.0% 7.0%