The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is as follows:
Cash and marketable securities € 2,000 Short-term debt € 76,100
Accounts receivable 120,500 Accounts payable 62,500
Inventory 125,500 Current liabilities € 138,600
Current assets € 248,000
Property, plant, and equipment 212,500 Long-term debt 209,100
Deferred taxes 45,500
Other assets 88,500 Shareholders' equity 246,800
Total € 594,500 Total € 594,500
The debt has just been refinanced at an interest rate of 4.75% (short term) and 6.75% (long term). The expected rate of return on the
company's shares is 13.75%. There are 7.51 million shares outstanding, and the shares are trading at €51. The tax rate is 25%.
Calculate this company's weighted-average cost of capital.
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Weighed-average cost of capital %
