Period Ending: Current Assets Income Statement (000s) Cash and Cash Equivalents Balance Sheet (000s) 31/12/2020 1,723,000...

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Period Ending: Current Assets Income Statement (000s) Cash and Cash Equivalents Balance Sheet (000s) 31/12/2020 1,723,000 Period Ending: Total Revenue Cost of Revenue Gross Profit 31/12/2020 Short Term Investments 108,128,800 Net Receivables 1,484,000 70,488,600 Inventory 37,640,200 Other Current Assets Total Current Assets 11,079,000 1,016,000 15,302,000 Operating Expenses Long Term Assets Sales, General and Admin. 21,884,200 Fixed Assets Other Operating Items 2,146,300 Operating Income 13,609,700 Goodwill Intangible Assets Other Assets Additional income/expense items 438,100 Total Assets 22,720,000 1,353,000 0 571,000 39,946,000 EBIT 14,047,800 Interest Expense 1,079,000 Liabilities & stockholders' Equity: Earnings Before Tax 12,968,800 Accounts Payable 9,473,000 Income Tax 4,720,300 Short Term Debt/Current Portion of Long-Term Debt 328,000 Net Income-Cont. Operations Other Current Liabilities 8,248,500 1,468,000 Total Current Liabilities 11,269,000 Long Term Debt 16,869,000 Other Liabilities 1,844,000 Deferred Liability Charges 642,000 30,624,000 Total Liabilities Share Holders Equity Common Stocks Capital Surplus Retained Earnings Treasury Stock Other Equity Total Equity 88,000 8,885,000 26,995,000 -26194000 -452000 9,322,000 Question: Using Corporate Tax Rate of 36.5%. For Game of Function Inc. (GFI), compute the market debt to equity (D/E) ratio, the cost of equity (rE) and the weighted average cost of capital (WACC) for GFI. It is assumed the cost of unlevered equity (ru) is 10%, use the (Q2) table below and showing working on another sheet. (Hints: (1) the market value of debt is the sum of Long-Term Debt and Short-Term Debt/Current Portion of Long-Term Debt subtracting Cash and Cash Equivalents from the balance sheet. (2) Use market value of equity in calculating WACC.) Question Information: Average Number of Shares Outstanding (000s) Average Cost of Debt 1,267,881 5.0% Current Stock Price Value of debt 000s Mkt value of Equity 000s Market value of assets Market D/E ratio Unlevered cost of equity (ru) rD rE WACC $114.33 Q1 Perfect Capital Mkt 15,474,000 144,956,835 160,430,835 0.11 10.00% 5.00% 10.53% 10.00% Q2 @36.5% tax rate Period Ending: Current Assets Income Statement (000s) Cash and Cash Equivalents Balance Sheet (000s) 31/12/2020 1,723,000 Period Ending: Total Revenue Cost of Revenue Gross Profit 31/12/2020 Short Term Investments 108,128,800 Net Receivables 1,484,000 70,488,600 Inventory 37,640,200 Other Current Assets Total Current Assets 11,079,000 1,016,000 15,302,000 Operating Expenses Long Term Assets Sales, General and Admin. 21,884,200 Fixed Assets Other Operating Items 2,146,300 Operating Income 13,609,700 Goodwill Intangible Assets Other Assets Additional income/expense items 438,100 Total Assets 22,720,000 1,353,000 0 571,000 39,946,000 EBIT 14,047,800 Interest Expense 1,079,000 Liabilities & stockholders' Equity: Earnings Before Tax 12,968,800 Accounts Payable 9,473,000 Income Tax 4,720,300 Short Term Debt/Current Portion of Long-Term Debt 328,000 Net Income-Cont. Operations Other Current Liabilities 8,248,500 1,468,000 Total Current Liabilities 11,269,000 Long Term Debt 16,869,000 Other Liabilities 1,844,000 Deferred Liability Charges 642,000 30,624,000 Total Liabilities Share Holders Equity Common Stocks Capital Surplus Retained Earnings Treasury Stock Other Equity Total Equity 88,000 8,885,000 26,995,000 -26194000 -452000 9,322,000 Question: Using Corporate Tax Rate of 36.5%. For Game of Function Inc. (GFI), compute the market debt to equity (D/E) ratio, the cost of equity (rE) and the weighted average cost of capital (WACC) for GFI. It is assumed the cost of unlevered equity (ru) is 10%, use the (Q2) table below and showing working on another sheet. (Hints: (1) the market value of debt is the sum of Long-Term Debt and Short-Term Debt/Current Portion of Long-Term Debt subtracting Cash and Cash Equivalents from the balance sheet. (2) Use market value of equity in calculating WACC.) Question Information: Average Number of Shares Outstanding (000s) Average Cost of Debt 1,267,881 5.0% Current Stock Price Value of debt 000s Mkt value of Equity 000s Market value of assets Market D/E ratio Unlevered cost of equity (ru) rD rE WACC $114.33 Q1 Perfect Capital Mkt 15,474,000 144,956,835 160,430,835 0.11 10.00% 5.00% 10.53% 10.00% Q2 @36.5% tax rate