Carlton Manufacturing Company Ltd Balance Sheet as at 31/12/19 ASSETS LIABILITIES Notes Accounts payable Bank loan...
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Carlton Manufacturing Company Ltd Balance Sheet as at 31/12/19 ASSETS LIABILITIES Notes Accounts payable Bank loan (interest only) Cash 110 150 Accounts Receivable 220 200 Inventory Property, plant & equipment 610 Mortgage Loan 2 540 1,170 Corporate bonds 3 350 Total Assets 2,110 Total liabilities 1,240 SHAREHOLDERS' EQUITY Ordinary shares 4 450 Preference Shares 210 Retained earnings Total shareholders' equity 210 870 Total liabilities and shareholders' equity 2,110 Notes 1. The interest rate on the bank loan is 9.7% p.a. 2. Theinterest rate on the mortgage loan is 6% p.a. 3. The corporate bonds have a credit rating of B+ and have 2 years to maturity. They make quarterly coupon payments at a coupon rate of 4% p.a. The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1.1. They have just paid a dividend of $0.05. The dividend is expected to grow at a rate of 7% p.a. for the next 4 years, and after that it will grow at a constant rate of 3% p.a. in perpetuity. 4. The preference shares have a par value of $1 each and are shown on the Balance Sheet at their par value. They pay a constant dividend of $0.11 and they are currently trading for $1.03. 5. 6. The market risk premium is 7.8%. 3 уг 195 6 yr 9 yr Rating 1 yг 123 2 yr 159 5 уг 10 yr 4 yr 7 yг 339 8 yr 375 AAA 231 267 303 411 447 AA+ 131 275 347 419 167 175 203 239 311 383 455 AA 139 211 247 283 319 355 391 427 463 AA- 147 183 219 255 291 327 363 399 435 471 A+ 155 191 227 263 299 335 371 407 443 479 A 163 199 415 451 235 243 271 307 343 379 487 A- 171 207 279 315 351 387 423 459 495 BBB+ 179 215 251 287 323 359 395 431 467 503 BBB 187 223 259 295 331 367 403 475 439 447 511 BBB- 195 231 267 303 339 375 411 483 519 BB+ 203 239 275 311 347 383 419 427 455 491 527 BB 211 247 283 319 355 391 463 499 507 535 BB- 219 255 291 327 363 399 435 471 543 B+ 227 263 299 335 371 407 443 479 515 551 B 235 271 307 343 379 415 451 487 523 559 B- 243 279 315 351 387 423 459 495 531 567 CCC+ 251 287 323 359 395 431 467 503 539 575 CCC 259 295 331 367 403 439 475 483 511 547 583 CC- 267 303 339 347 375 411 447 519 555 591 CC 275 311 383 419 455 491 527 563 599 283 319 355 391 427 463 499 535 571 607 Carlton Manufacturing Company Ltd Balance Sheet as at 31/12/19 ASSETS LIABILITIES Notes Accounts payable Bank loan (interest only) Cash 110 150 Accounts Receivable 220 200 Inventory Property, plant & equipment 610 Mortgage Loan 2 540 1,170 Corporate bonds 3 350 Total Assets 2,110 Total liabilities 1,240 SHAREHOLDERS' EQUITY Ordinary shares 4 450 Preference Shares 210 Retained earnings Total shareholders' equity 210 870 Total liabilities and shareholders' equity 2,110 Notes 1. The interest rate on the bank loan is 9.7% p.a. 2. Theinterest rate on the mortgage loan is 6% p.a. 3. The corporate bonds have a credit rating of B+ and have 2 years to maturity. They make quarterly coupon payments at a coupon rate of 4% p.a. The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1.1. They have just paid a dividend of $0.05. The dividend is expected to grow at a rate of 7% p.a. for the next 4 years, and after that it will grow at a constant rate of 3% p.a. in perpetuity. 4. The preference shares have a par value of $1 each and are shown on the Balance Sheet at their par value. They pay a constant dividend of $0.11 and they are currently trading for $1.03. 5. 6. The market risk premium is 7.8%. 3 уг 195 6 yr 9 yr Rating 1 yг 123 2 yr 159 5 уг 10 yr 4 yr 7 yг 339 8 yr 375 AAA 231 267 303 411 447 AA+ 131 275 347 419 167 175 203 239 311 383 455 AA 139 211 247 283 319 355 391 427 463 AA- 147 183 219 255 291 327 363 399 435 471 A+ 155 191 227 263 299 335 371 407 443 479 A 163 199 415 451 235 243 271 307 343 379 487 A- 171 207 279 315 351 387 423 459 495 BBB+ 179 215 251 287 323 359 395 431 467 503 BBB 187 223 259 295 331 367 403 475 439 447 511 BBB- 195 231 267 303 339 375 411 483 519 BB+ 203 239 275 311 347 383 419 427 455 491 527 BB 211 247 283 319 355 391 463 499 507 535 BB- 219 255 291 327 363 399 435 471 543 B+ 227 263 299 335 371 407 443 479 515 551 B 235 271 307 343 379 415 451 487 523 559 B- 243 279 315 351 387 423 459 495 531 567 CCC+ 251 287 323 359 395 431 467 503 539 575 CCC 259 295 331 367 403 439 475 483 511 547 583 CC- 267 303 339 347 375 411 447 519 555 591 CC 275 311 383 419 455 491 527 563 599 283 319 355 391 427 463 499 535 571 607
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Related Book For
Financial Accounting
ISBN: 978-1259222139
9th edition
Authors: Robert Libby, Patricia Libby, Frank Hodge
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