The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows: Cash and marketable 2,200 € Short-term debt € 76,300 securities Accounts receivable 120,700 Accounts payable 62,700 € 139,000 Inventory 125,700 € 248,600 Current liabilities Current assets Property, plant, and equipment 212,700 Long-term debt 209,300 Deferred taxes 45,700 88,300 Other assets Shareholders' equity 247,000 Total € 595,300 € 595,300 Total The debt has just been refinanced at an interest rate of 4.25% (short term) and 6.25% (long term). The expected rate of return on the company's shares is 13.25%. There are 7.53 million shares outstanding, and the shares are trading at €53. The tax rate is 25%. Calculate this company's weighed-average cost of capital. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Weighed-average cost of capital

Question
The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows:
Cash and marketable
2,200
€
Short-term debt
€ 76,300
securities
Accounts receivable
120,700
Accounts payable
62,700
€ 139,000
Inventory
125,700
€ 248,600
Current liabilities
Current assets
Property, plant, and
equipment
212,700
Long-term debt
209,300
Deferred taxes
45,700
88,300
Other assets
Shareholders' equity
247,000
Total
€ 595,300
€ 595,300
Total
The debt has just been refinanced at an interest rate of 4.25% (short term) and 6.25% (long term). The expected rate of return on the
company's shares is 13.25%. There are 7.53 million shares outstanding, and the shares are trading at €53. The tax rate is 25%.
Calculate this company's weighed-average cost of capital. (Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
Weighed-average cost of capital

Image Transcription

The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows: Cash and marketable 2,200 € Short-term debt € 76,300 securities Accounts receivable 120,700 Accounts payable 62,700 € 139,000 Inventory 125,700 € 248,600 Current liabilities Current assets Property, plant, and equipment 212,700 Long-term debt 209,300 Deferred taxes 45,700 88,300 Other assets Shareholders' equity 247,000 Total € 595,300 € 595,300 Total The debt has just been refinanced at an interest rate of 4.25% (short term) and 6.25% (long term). The expected rate of return on the company's shares is 13.25%. There are 7.53 million shares outstanding, and the shares are trading at €53. The tax rate is 25%. Calculate this company's weighed-average cost of capital. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Weighed-average cost of capital

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