Hello. I'd like the functions in order to calculate the following myself. I am attaching the numbers I have for Ecolab but I am not sure if it contains what I need in order to solve this so if at least I can get the formulas then I can figure it out before-tax and after-tax component cost of debt; (Note: Use 21 % tax rate for your chosen corporation). component cost of preferred stock if the company uses preferred stocks in its capital structure; three approaches (CAPM, DCF, bond-yield-plus-risk-premium) to estimate the component cost of common equity of the firm. Then assign a weight for each method and estimate weighted average cost of equity. Using this average: - Calculate the firm’s weighted average cost of capital (WACC) using market-based capital weights. - Calculate the firm’s weighted average cost of capital (WACC) using book-based capital weights. - Calculate the firm’s weighted average cost of capital (WACC) using optimal capital structure weights Ecolab Inc (NYS: ECL) Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 12/31/2018 Currency USD Audit Status Not Available Consolidated Yes Scale Thousands Cash & cash equivalents 114700 Short-term investments - Accounts receivable, gross 2723100 Allowance for doubtful accounts 60600 Accounts receivable, net 2662500 Finished goods 1016900 Raw materials & parts 525600 Inventories at first-in, first-out ("FIFO") cost 1542500 Excess of FIFO cost over last-in, first-out cost -3900 Inventories 1546400 Deferred income taxes - Prepaid expenses & other current assets - Prepaid assets 132100 Derivative assets 42800 Other current assets 35000 Other current assets 354100 Total current assets 4677700 Taxes receivable 144200 Land 214500 Buildings & improvements - Buildings & leasehold improvements 1279400 Leasehold improvements - Buildings & leaseholds - Machinery & equipment 2313700 Merchandising equipment - Merchandising & customer equipment 2565500 Capitalized software 666200 Construction in progress 400200 Property, plant & equipment, gross 7439500 Accumulated depreciation 3603500 Property, plant & equipment, net 3836000 Investment in Henkel-Ecolab joint venture - Net assets of Ecolab Europe - Net assets of Ecolab Inc. & discontinued operations - Goodwill 7078000 Other intangible assets, net 3797700 Other assets, net - Intangible assets, net - Deferred income taxes 105100 Deferred financing costs - Pension 39000 Derivative assets 11800 Restricted cash 179300 Sole supply fees - Other assets 349900 Other assets 685100 Total assets 20074500 Commercial paper 165400 Notes payable 176800 Long-term debt, current maturities 401400 Short-term debt 743600 Accounts payable 1255600 Compensation & benefits 579700 Property, payroll & other taxes - Other accrued expenses - Dividends payable - Income taxes 100600 Other current liabilities - Discounts & rebates 291300 Dividends payable 132400 Interest payable 44500 Taxes payable, other than income 116900 Derivative liabilities 20100 Foreign exchange contracts - Restructuring 73700 Contract liability 75800 Future consideration payable to Champion sellers - Other current liabilities 251400 Other current liabilities 1006100 Total current liabilities 3685600 Senior notes 6447400 Series A & B senior notes 249400 Notes - Capital lease obligations 6200 Euro notes - Commercial paper - Medium-term notes - Multicurrency credit agreement - Other long-term debt - Total debt 6703000 Long-term debt, current maturities 401400 Long-term debt 6301600 Postretirement health care & pension benefits 944300 Deferred income taxes 764600 Deferred income taxes - Income taxes payable - noncurrent - Restructuring - Other liabilities - Other liabilities 324800 Other liabilities - Series A cumulative perferred stock - Total liabilities 12020900 Common stock 357000 Additional paid-in capital 5633200 Retained earnings 8909500 Deferred compensation - Cumulative translation - Unrealized gain (loss) on derivative financial instruments, net of tax 2000 Unrecognized pension & postretirement benefit expense, net of tax -518900 Cumulative translation, net of tax -1244800 Accumulated other comprehensive income (loss) -1761700 Treasury stock 5134800 Total Ecolab, Inc. shareholders' equity 8003200 Noncontrolling interest 50400 Total equity 8053600

Hello. I'd like the functions in order to calculate the following myself. I am attaching the numbers I have for Ecolab but I am not sure if it contains what I need in order to solve this so if at least I can get the formulas then I can figure it out before-tax and after-tax component cost of debt; (Note: Use 21 % tax rate for your chosen corporation). component cost of preferred stock if the company uses preferred stocks in its capital structure; three approaches (CAPM, DCF, bond-yield-plus-risk-premium) to estimate the component cost of common equity of the firm. Then assign a weight for each method and estimate weighted average cost of equity. Using this average: - Calculate the firm’s weighted average cost of capital (WACC) using market-based capital weights. - Calculate the firm’s weighted average cost of capital (WACC) using book-based capital weights. - Calculate the firm’s weighted average cost of capital (WACC) using optimal capital structure weights Ecolab Inc (NYS: ECL) Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 12/31/2018 Currency USD Audit Status Not Available Consolidated Yes Scale Thousands Cash & cash equivalents 114700 Short-term investments - Accounts receivable, gross 2723100 Allowance for doubtful accounts 60600 Accounts receivable, net 2662500 Finished goods 1016900 Raw materials & parts 525600 Inventories at first-in, first-out ("FIFO") cost 1542500 Excess of FIFO cost over last-in, first-out cost -3900 Inventories 1546400 Deferred income taxes - Prepaid expenses & other current assets - Prepaid assets 132100 Derivative assets 42800 Other current assets 35000 Other current assets 354100 Total current assets 4677700 Taxes receivable 144200 Land 214500 Buildings & improvements - Buildings & leasehold improvements 1279400 Leasehold improvements - Buildings & leaseholds - Machinery & equipment 2313700 Merchandising equipment - Merchandising & customer equipment 2565500 Capitalized software 666200 Construction in progress 400200 Property, plant & equipment, gross 7439500 Accumulated depreciation 3603500 Property, plant & equipment, net 3836000 Investment in Henkel-Ecolab joint venture - Net assets of Ecolab Europe - Net assets of Ecolab Inc. & discontinued operations - Goodwill 7078000 Other intangible assets, net 3797700 Other assets, net - Intangible assets, net - Deferred income taxes 105100 Deferred financing costs - Pension 39000 Derivative assets 11800 Restricted cash 179300 Sole supply fees - Other assets 349900 Other assets 685100 Total assets 20074500 Commercial paper 165400 Notes payable 176800 Long-term debt, current maturities 401400 Short-term debt 743600 Accounts payable 1255600 Compensation & benefits 579700 Property, payroll & other taxes - Other accrued expenses - Dividends payable - Income taxes 100600 Other current liabilities - Discounts & rebates 291300 Dividends payable 132400 Interest payable 44500 Taxes payable, other than income 116900 Derivative liabilities 20100 Foreign exchange contracts - Restructuring 73700 Contract liability 75800 Future consideration payable to Champion sellers - Other current liabilities 251400 Other current liabilities 1006100 Total current liabilities 3685600 Senior notes 6447400 Series A & B senior notes 249400 Notes - Capital lease obligations 6200 Euro notes - Commercial paper - Medium-term notes - Multicurrency credit agreement - Other long-term debt - Total debt 6703000 Long-term debt, current maturities 401400 Long-term debt 6301600 Postretirement health care & pension benefits 944300 Deferred income taxes 764600 Deferred income taxes - Income taxes payable - noncurrent - Restructuring - Other liabilities - Other liabilities 324800 Other liabilities - Series A cumulative perferred stock - Total liabilities 12020900 Common stock 357000 Additional paid-in capital 5633200 Retained earnings 8909500 Deferred compensation - Cumulative translation - Unrealized gain (loss) on derivative financial instruments, net of tax 2000 Unrecognized pension & postretirement benefit expense, net of tax -518900 Cumulative translation, net of tax -1244800 Accumulated other comprehensive income (loss) -1761700 Treasury stock 5134800 Total Ecolab, Inc. shareholders' equity 8003200 Noncontrolling interest 50400 Total equity 8053600

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter13: Capital Structure Concepts

Section: Chapter Questions

Problem 5P

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Question

before-tax and after-tax component cost of debt; (Note: Use 21 % tax rate for your chosen corporation).
component cost of preferred stock if the company uses preferred stocks in its capital structure;
three approaches (CAPM, DCF, bond-yield-plus-risk-premium) to estimate the component cost of common equity of the firm. Then assign a weight for each method and estimate weighted average cost of equity. Using this average:

- Calculate the firm’s weighted average cost of capital (WACC) using market-based capital weights.

- Calculate the firm’s weighted average cost of capital (WACC) using book-based capital weights.

- Calculate the firm’s weighted average cost of capital (WACC) using optimal capital structure weights

Ecolab Inc (NYS: ECL)

Exchange rate used is that of the Year End reported date


As Reported Annual Balance Sheet
Report Date	12/31/2018
Currency	USD
Audit Status	Not Available
Consolidated	Yes
Scale	Thousands
Cash & cash equivalents	114700
Short-term investments	-
Accounts receivable, gross	2723100
Allowance for doubtful accounts	60600
Accounts receivable, net	2662500
Finished goods	1016900
Raw materials & parts	525600
Inventories at first-in, first-out ("FIFO") cost	1542500
Excess of FIFO cost over last-in, first-out cost	-3900
Inventories	1546400
Deferred income taxes	-
Prepaid expenses & other current assets	-
Prepaid assets	132100
Derivative assets	42800
Other current assets	35000
Other current assets	354100
Total current assets	4677700
Taxes receivable	144200
Land	214500
Buildings & improvements	-
Buildings & leasehold improvements	1279400
Leasehold improvements	-
Buildings & leaseholds	-
Machinery & equipment	2313700
Merchandising equipment	-
Merchandising & customer equipment	2565500
Capitalized software	666200
Construction in progress	400200
Property, plant & equipment, gross	7439500
Accumulated depreciation	3603500
Property, plant & equipment, net	3836000
Investment in Henkel-Ecolab joint venture	-
Net assets of Ecolab Europe	-
Net assets of Ecolab Inc. & discontinued operations	-
Goodwill	7078000
Other intangible assets, net	3797700
Other assets, net	-
Intangible assets, net	-
Deferred income taxes	105100
Deferred financing costs	-
Pension	39000
Derivative assets	11800
Restricted cash	179300
Sole supply fees	-
Other assets	349900
Other assets	685100
Total assets	20074500
Commercial paper	165400
Notes payable	176800
Long-term debt, current maturities	401400
Short-term debt	743600
Accounts payable	1255600
Compensation & benefits	579700
Property, payroll & other taxes	-
Other accrued expenses	-
Dividends payable	-
Income taxes	100600
Other current liabilities	-
Discounts & rebates	291300
Dividends payable	132400
Interest payable	44500
Taxes payable, other than income	116900
Derivative liabilities	20100
Foreign exchange contracts	-
Restructuring	73700
Contract liability	75800
Future consideration payable to Champion sellers	-
Other current liabilities	251400
Other current liabilities	1006100
Total current liabilities	3685600
Senior notes	6447400
Series A & B senior notes	249400
Notes	-
Capital lease obligations	6200
Euro notes	-
Commercial paper	-
Medium-term notes	-
Multicurrency credit agreement	-
Other long-term debt	-
Total debt	6703000
Long-term debt, current maturities	401400
Long-term debt	6301600
Postretirement health care & pension benefits	944300
Deferred income taxes	764600
Deferred income taxes	-
Income taxes payable - noncurrent	-
Restructuring	-
Other liabilities	-
Other liabilities	324800
Other liabilities	-
Series A cumulative perferred stock	-
Total liabilities	12020900
Common stock	357000
Additional paid-in capital	5633200
Retained earnings	8909500
Deferred compensation	-
Cumulative translation	-
Unrealized gain (loss) on derivative financial instruments, net of tax	2000
Unrecognized pension & postretirement benefit expense, net of tax	-518900
Cumulative translation, net of tax	-1244800
Accumulated other comprehensive income (loss)	-1761700
Treasury stock	5134800
Total Ecolab, Inc. shareholders' equity	8003200
Noncontrolling interest	50400
Total equity	8053600

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