Clearview systems Ltd December 31, 2021. (ff information appears to be missing, change the row height to see it.) Based in Winnipeg, Manitoba, Clearview Systems Ltd. (CVL) was founded to provide security systems, facilities controls and related services. CVL established a solid reputation for quality and the business grew thanks to strong relationships with large, long-term customers in Canada and the United States. The Research and Innovation Group (RIG) is the development side of the company. They are considering a new contract that will strain resources for not only RIG, but the entire company. With an upfront cost of $7.0 million, managers understand that the cost of capital will be a key part of maintaining and improving Clearview's competitive edge. You have been asked to calculate the company's weighted average cost of capital (WACC), based on the following information. Over the last five years the annual dividends on the firm's common stock have grown at 3.00 percent per year and this growth is expected to continue indefinitely. A common share dividend of $1.810 per share was recently paid. Common shares trade at $72.000 per share. The company has authorized 255,000 common shares, with 224,000 common shares issued and outstanding. The company has issued 121,000 of the 138,000 preferred shares suthorized. The annual preferred share dividend is $1.240 per share. The latest preferred share price is $45.100 per share. CVL has an outstanding bond issue, payable semi-annually, that originally had a 30 year maturity. The initial bond offering was snld 8 vears avo at nar and raised $21.20 million dollars. (Io be soerific. 21.200 honds were sold at $1 non each.I The vield to 100 Questions Sheet V100 Answer Sheet expected to continue indefinitely. A common share dividend of $1.810 per share was recently paid. Common shares trade at $72.000 per share. The company has authorized 255,000 common shares, with 224,000 common shares issued and outstanding, The company has issued 121,000 of the 138,000 preferred shares authorized. The annual preferred share dividend is $1.240 per share. The latest preferred share price is $45.100 per share. CVL has an outstanding bond issue, payable semi-annually, that originally had a 30 year maturity. The initial bond offering was sold 8 years ago, at par and raised $21.20 million dollars. (To be specific 21,200 bonds were sold at $1,000 each.) The yield to maturity, when they were issued, was 5.20 percent. Currently, the nominal yield to maturity on bonds with a similar risk is at 4.94 percent. The company will use its current capital structure to set target weights for debt, preferred shares and common shares. Flotation costs are 4.00 percent for preferred shares, 3.00 percent for common shares and 4.00 percent for debt. The company's tax rate is 45.00 percent. After-tax earnings for the year will be $2.00 million and the company has a payout ratio of 30.00 percent. Use this information to answer the questions on the following requirements (Uf information oppears to be missing, change the row height to see it.) Requirements: A. Find market values of outstanding bonds, preferred shares and common shares: 1. Bonds: a. What is the market value of each hond? (Enter your answer to two decimal places. (e.g. \$12.34)) b. What is the total market value of bonds at Dec 31, 2021 (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million.) 2. Preferred shares: What is the total market value of preferred shares at Dec 31, 2021 (Round your answer to whole numbers: For example, 51,234,000 not : 51.234 million.) 3. Common shares: What is the total market value of common shares at Dec 31, 2021 (Round your answer to whole numbers. For example, \$1,234,000 not \$1.234 malion.) B. What weights are assigned to debt, preferred shares and common equity on Dec 31, 2021 (Round all your answers to two decimal places. If you want to enter the example, enter 12.34 (not 0.1234 ) and do not enter the percent sign.) C. Calculate the after-tax cost of the various components of WACC (Round all your answers to two decimal places. If you want to enter the number 12.34%, for examp 0.1234 ) and do not enter the percent sign.) 8. What weights are assigned to debc, preterred shares and common equily on Dec 31,2021 (llound all your antiwers to twoo decimal glaces, If you want to eatae the number 12.24. for example, emter 12.34 (not 0.1234 ) and do not enter the percent sign.) C. Calculate the after-tax cost of the various components of WACC (Round all your answers to two decimal places. If you want to enter the number 12.34, for examele, enter 12.34 inet 0.1234) and do not enter the percent sign.) 1. Eionds a. What is the noninal yield to-maturity? b. What is the effective yield-to muturity? c. Cakulate the after-tax cost of new debt (using the effective yicid to maturity). 2. Preferred shares: 3. Common equify in the form of retained earnings: 4. Common equity in the form of new thares: D. What is the Weichited Average Cost of Capital if: 1. The compary uses new debr, new nevterred shares and lust retained earnings? 2. The company uses new debt, new predered ahares and new cominon shares? E. How much of the new capital projects can be funded without usine new shareholders? Uniens directed otherwic, attentlon to the details of the case A. Firal maiket valians of outstanding bonds, preteried shaees and common shars: b. What is the fotal market value of bends at bec 34 , a02 (Rocent yua anyww to Whole munbers. for example, 51,234000 not 51.214 million.) \begin{tabular}{l} 2. Prefeired shares: What is the total market value of prefened thares at Dec 31, \\ 2ozt (Round yout answer to whote numbers. For esample, 51,234,000 not $1.234 \\ mullion.) \\ \hline Solutions Output for Cuestions 2 \\ \hline Total Market Value of Preferred Shares \\ \hline Totarket Value of Preferted Share \end{tabular} B. What weights are assigned to debt, preferred shares and opmimon equity on Dec 71, 2021 V100 Questions Sheet V100 Answer Sheet Present value of Principal at maturaty Tetal Market value of the Bonds Accessibilityo Irviestigate 11C Partly cloudy and do not enter the percent sign.) 1. Bonds a. What is the nominal yield-to-maturity? b. What is the effective yield-to-maturity? 5. Calculate the after-tax cost of new debt (using the effective yield-to- amb de bot enles the perient sign.) 9. What is the Wrighted Average Cost of Capital if: 0. What is the Weightrd Average Cost of capital if: 1. the conpuny uses new debt, new preferred shares and put tetained eamangs? V100 Questions Sheet V100 Answer Sheet Acxemibility. Investigate Clearview systems Ltd December 31, 2021. (ff information appears to be missing, change the row height to see it.) Based in Winnipeg, Manitoba, Clearview Systems Ltd. (CVL) was founded to provide security systems, facilities controls and related services. CVL established a solid reputation for quality and the business grew thanks to strong relationships with large, long-term customers in Canada and the United States. The Research and Innovation Group (RIG) is the development side of the company. They are considering a new contract that will strain resources for not only RIG, but the entire company. With an upfront cost of $7.0 million, managers understand that the cost of capital will be a key part of maintaining and improving Clearview's competitive edge. You have been asked to calculate the company's weighted average cost of capital (WACC), based on the following information. Over the last five years the annual dividends on the firm's common stock have grown at 3.00 percent per year and this growth is expected to continue indefinitely. A common share dividend of $1.810 per share was recently paid. Common shares trade at $72.000 per share. The company has authorized 255,000 common shares, with 224,000 common shares issued and outstanding. The company has issued 121,000 of the 138,000 preferred shares suthorized. The annual preferred share dividend is $1.240 per share. The latest preferred share price is $45.100 per share. CVL has an outstanding bond issue, payable semi-annually, that originally had a 30 year maturity. The initial bond offering was snld 8 vears avo at nar and raised $21.20 million dollars. (Io be soerific. 21.200 honds were sold at $1 non each.I The vield to 100 Questions Sheet V100 Answer Sheet expected to continue indefinitely. A common share dividend of $1.810 per share was recently paid. Common shares trade at $72.000 per share. The company has authorized 255,000 common shares, with 224,000 common shares issued and outstanding, The company has issued 121,000 of the 138,000 preferred shares authorized. The annual preferred share dividend is $1.240 per share. The latest preferred share price is $45.100 per share. CVL has an outstanding bond issue, payable semi-annually, that originally had a 30 year maturity. The initial bond offering was sold 8 years ago, at par and raised $21.20 million dollars. (To be specific 21,200 bonds were sold at $1,000 each.) The yield to maturity, when they were issued, was 5.20 percent. Currently, the nominal yield to maturity on bonds with a similar risk is at 4.94 percent. The company will use its current capital structure to set target weights for debt, preferred shares and common shares. Flotation costs are 4.00 percent for preferred shares, 3.00 percent for common shares and 4.00 percent for debt. The company's tax rate is 45.00 percent. After-tax earnings for the year will be $2.00 million and the company has a payout ratio of 30.00 percent. Use this information to answer the questions on the following requirements (Uf information oppears to be missing, change the row height to see it.) Requirements: A. Find market values of outstanding bonds, preferred shares and common shares: 1. Bonds: a. What is the market value of each hond? (Enter your answer to two decimal places. (e.g. \$12.34)) b. What is the total market value of bonds at Dec 31, 2021 (Round your answer to whole numbers. For example, $1,234,000 not $1.234 million.) 2. Preferred shares: What is the total market value of preferred shares at Dec 31, 2021 (Round your answer to whole numbers: For example, 51,234,000 not : 51.234 million.) 3. Common shares: What is the total market value of common shares at Dec 31, 2021 (Round your answer to whole numbers. For example, \$1,234,000 not \$1.234 malion.) B. What weights are assigned to debt, preferred shares and common equity on Dec 31, 2021 (Round all your answers to two decimal places. If you want to enter the example, enter 12.34 (not 0.1234 ) and do not enter the percent sign.) C. Calculate the after-tax cost of the various components of WACC (Round all your answers to two decimal places. If you want to enter the number 12.34%, for examp 0.1234 ) and do not enter the percent sign.) 8. What weights are assigned to debc, preterred shares and common equily on Dec 31,2021 (llound all your antiwers to twoo decimal glaces, If you want to eatae the number 12.24. for example, emter 12.34 (not 0.1234 ) and do not enter the percent sign.) C. Calculate the after-tax cost of the various components of WACC (Round all your answers to two decimal places. If you want to enter the number 12.34, for examele, enter 12.34 inet 0.1234) and do not enter the percent sign.) 1. Eionds a. What is the noninal yield to-maturity? b. What is the effective yield-to muturity? c. Cakulate the after-tax cost of new debt (using the effective yicid to maturity). 2. Preferred shares: 3. Common equify in the form of retained earnings: 4. Common equity in the form of new thares: D. What is the Weichited Average Cost of Capital if: 1. The compary uses new debr, new nevterred shares and lust retained earnings? 2. The company uses new debt, new predered ahares and new cominon shares? E. How much of the new capital projects can be funded without usine new shareholders? Uniens directed otherwic, attentlon to the details of the case A. Firal maiket valians of outstanding bonds, preteried shaees and common shars: b. What is the fotal market value of bends at bec 34 , a02 (Rocent yua anyww to Whole munbers. for example, 51,234000 not 51.214 million.) \begin{tabular}{l} 2. Prefeired shares: What is the total market value of prefened thares at Dec 31, \\ 2ozt (Round yout answer to whote numbers. For esample, 51,234,000 not $1.234 \\ mullion.) \\ \hline Solutions Output for Cuestions 2 \\ \hline Total Market Value of Preferred Shares \\ \hline Totarket Value of Preferted Share \end{tabular} B. What weights are assigned to debt, preferred shares and opmimon equity on Dec 71, 2021 V100 Questions Sheet V100 Answer Sheet Present value of Principal at maturaty Tetal Market value of the Bonds Accessibilityo Irviestigate 11C Partly cloudy and do not enter the percent sign.) 1. Bonds a. What is the nominal yield-to-maturity? b. What is the effective yield-to-maturity? 5. Calculate the after-tax cost of new debt (using the effective yield-to- amb de bot enles the perient sign.) 9. What is the Wrighted Average Cost of Capital if: 0. What is the Weightrd Average Cost of capital if: 1. the conpuny uses new debt, new preferred shares and put tetained eamangs? V100 Questions Sheet V100 Answer Sheet Acxemibility. Investigate