The tollowing is the pertinant information regarding the financial structure for the Hops Along Brew Pub. You have been requested to provide a pre tax analysis of this structure Total Investment 2$ 5,000,000 $ Debt Financed Equity Financed Equity Investors share of Net Profit 3,000,000 $ 2,000,000 50.0% Debt Interest Rate 7.5% Annual Debt Service 290,000 Forecast Cash Flow before debt service $ 1,050,000

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 47P
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The following is the pertinant information regarding the financial structure for the Hops Along Brew Pub. You
have been requested to provide a pre tax analysis of this structure
Total Investment
Debt Financed
5,000,000
3,000,000
Equity Financed
2,000,000
Equity Investors share of Net Profit
50.0%
Debt Interest Rate
7.5%
Annual Debt Service
2$
290,000
Forecast Cash Flow before debt service
2$
1,050,000
Required: Calculate the following USING EXCEL FORMULAS in the cells indicated below
Weight of Debt
Weight of Equity
Cost of Debt
Cost of Equity
Weighted cost of Debt
Weighted cost of Equity
Weighted Average Cost of Capital
Transcribed Image Text:The following is the pertinant information regarding the financial structure for the Hops Along Brew Pub. You have been requested to provide a pre tax analysis of this structure Total Investment Debt Financed 5,000,000 3,000,000 Equity Financed 2,000,000 Equity Investors share of Net Profit 50.0% Debt Interest Rate 7.5% Annual Debt Service 2$ 290,000 Forecast Cash Flow before debt service 2$ 1,050,000 Required: Calculate the following USING EXCEL FORMULAS in the cells indicated below Weight of Debt Weight of Equity Cost of Debt Cost of Equity Weighted cost of Debt Weighted cost of Equity Weighted Average Cost of Capital
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