Fritz Foods Corporation, a premium pet food manufacturer, would like you to calculate the weighted average...

   

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Fritz Foods Corporation, a premium pet food manufacturer, would like you to calculate the weighted average cost of capital as they are considering a new expansion project. You have been provided with the firm's most recent financial statements as well as the following additional information: Fritz Foods Corporation Balance Sheet (in $ millions) Assets Liabilities Cash 11 Accounts payable 37 Accounts receivable 30 Notes payable 10 Inventories 15 Total current assets 56 Total current liabilities Net Property, Plant, & 80 Long-term debt 47 100 Equipment (6% coupon, $1,000 par, semi-annual payments, 14 years to maturity) Other fixed 41 Preferred stock (8%, $25 par) 8 Total fixed assets 121 Common stock (3 million shares) 12 Retained earnings 10 Total Assets 177 Total Liabilities & Equity 177 Fritz Foods Corporation Income Statement (in $ millions) Sales Cost of goods sold Fixed operating expenses Deprecation EBIT Interest expenses EBT Taxes (30%) Net Income Preferred dividends Earnings for common shareholders 187 153 22 1 11 7 4 1.2 2.8 0.64 2.16 Fritz Foods Corporation, a premium pet food manufacturer, would like you to calculate the weighted average cost of capital as they are considering a new expansion project. You have been provided with the firm's most recent financial statements as well as the following additional information: Fritz Foods Corporation Balance Sheet (in $ millions) Assets Liabilities Cash 11 Accounts payable 37 Accounts receivable 30 Notes payable 10 Inventories 15 Total current assets 56 Total current liabilities Net Property, Plant, & 80 Long-term debt 47 100 Equipment (6% coupon, $1,000 par, semi-annual payments, 14 years to maturity) Other fixed 41 Preferred stock (8%, $25 par) 8 Total fixed assets 121 Common stock (3 million shares) 12 Retained earnings 10 Total Assets 177 Total Liabilities & Equity 177 Fritz Foods Corporation Income Statement (in $ millions) Sales Cost of goods sold Fixed operating expenses Deprecation EBIT Interest expenses EBT Taxes (30%) Net Income Preferred dividends Earnings for common shareholders 187 153 22 1 11 7 4 1.2 2.8 0.64 2.16