Using the financial statements mentioned above estimate the annual rate of interest paid by the corporation (cost of debt). Also, find the tax rate and capitalization ratio (proportions among equity and debt). Using these values that you have found estimate the annual weighted cost of capital (WACC) of the corporation. Balance SheetAll numbers in thousandsBreakdown12/31/201912/31/201812/31/2017> Total Assets25,051,00023,696,00023,948,000> Total Liabilities Net Minority Int.24,348,00021,471,00020,217,000> Total Equity Gross Minority Inte.703,0002,225,0003,731,000Total Capitalization10,666,00010,739,00011,571,000Common Stock Equity703,0002,225,0003,731,000Capital Lease Obligations882,000Net Tangible Assets-16,986,000-15,194,000-14,281,000Working Capital-3,550,000-3,731,000-3,263,000Invested Capital11,643,00011,572,00011,969,000Tangible Book Value-16,986,000-15,194,000-14,281,000Total Debt11,822,0009,347,0008,238,000Net Debt10,715,0009,031,0007,855,000Share Issued324,200334,100354,800Ordinary Shares Number324,200334,100354,800 Income StatementAll numbers in thousands/ ExparBreakdownTTM12/31/201912/31/201812/31/2017> Total Revenue13,770,00020,972,00020,758,00022,894,000Cost of Revenue12,032,00017,755,00017,084,00019,192,000Gross Profit1,738,0003,217,0003,674,0003,702,000> Operating Expense1,184,0001,300,0001,279,0001,153,000Operating Income438,0001,938,0002,521,0002,518,000> Net Non Operating Interest Inc.-402,000-368,000-318,000-250,000> Other Income Expense138,00029,000142,000568,000Pretax Income174,0001,599,0002,345,0002,836,000Таx Provision-2,000326,000438,0001,464,000> Net Income Common Stockhold.176,0001,273,0001,907,0001,372,000Diluted NI Available to Com Stock.176,0001,273,0001,907,0001,372,000Basic EPS0.00380.0039Diluted EPS0.00380.0038Basic Average Shares332,700375,200Diluted Average Shares335,500379,900Total Operating Income as Reported486,0001,800,0002,366,0002,359,000Total Expenses13,332,00019,034,00018,237,00020,376,000Net Income from Continuing & Dis.176,0001,273,0001,907,0001,372,000Normalized Income38,0301,260,2641,875,2931,054,600Interest Income26,00026,00022,00038,000Interest Expense428,000394,000340,000288,000Net Interest Income-402,000-368,000-318,000-250,000EBIT602,0001,993,0002,685,0003,124,000EBITDA1,167,000Reconciled Cost of Revenue11,921,00017,693,00017,026,00019,192,000Reconciled Depreciation565,000403,000284,000290,000Net Income from Continuing Oper.176,0001,273,0001,907,0001,372,000Total Unusual Items Excluding Goo.189,00016,00039,000529,000Total Unusual Items189,00016,00039,000529,000Normalized EBITDA978,0002,380,0002,930,0002,885,000Tax Rate for CalcsTax Effect of Unusual Items51,0303,2647,293211,600

Using the financial statements mentioned above estimate the annual rate of interest paid by the corporation (cost of debt). Also, find the tax rate and capitalization ratio (proportions among equity and debt). Using these values that you have found estimate the annual weighted cost of capital (WACC) of the corporation.

Using the financial statements mentioned above estimate the annual rate of interest paid by the corporation (cost of debt). Also, find the tax rate and capitalization ratio (proportions among equity and debt). Using these values that you have found estimate the annual weighted cost of capital (WACC) of the corporation.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.1C: Leverage Cook Corporation issued financial statements at December 31, 2019, that include the...

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