Proj 3 - CASE 1 PART1 1)Capital Structure D= P= E= V= 2)cost 3)cost 4)cost 5)cost 31.5 16.1 111 158.6 w.d= w.p= w.e= w.e= 9.13 3.612 7.609 10.920

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
CASE 1 PART1 1)Capital Structure D= 31.5 w.d= 0.2 P= 16.1 w.p= 0.1 E= 111 w.e= 0.7 V= 158.6 2)cost debt w.d= 3.612% 3)cost pref. stock w.p= 7.609% 4)cost equity(CAPM) w.e= 10.920% 5)cost equity (Dividends w.e= 10.925% 6)WACC= 9.13% PART 2A YEAR More Happy MElectron Groove Mart Well-Mart 0 -500 -600 -400 1 150 120 75 2 150 140 80 3 120 180 85 4 100 170 90 5 100 160 90 6 100 150 90 1)IRR= 12.76% 13.21% 7.17% 2)NPV= $50.01  $78.00  ($23.84) 4)Use only for "average risk" projects. (More Happy Mart) PART 2B 1)Electron Groove r.e= 18.20% WACC 14.23% 2)Well-Mart r.e= 6.76% WACC 6.22% 3) NPV Electron Groove ($17.22) Well-Mart $12.35  The WACCs for Electron Groove & Well-Mart have changed.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Case 2 YEAR 0 1 2 3 4 5 6 7 8 9 10 MARCRS Allowance as % 0.1 0.18 0.14 0.12 0.09 0.07 0.07 0.07 0.07 0.06 Players salaries 110 121 133.1 146.41 161.05 177.16 194.87 214.36 235.79
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/29/2008 for the course BA 310 taught by Professor Baer during the Spring '08 term at University of Illinois at Urbana–Champaign.

Page1 / 5

Proj 3 - CASE 1 PART1 1)Capital Structure D= P= E= V= 2)cost 3)cost 4)cost 5)cost 31.5 16.1 111 158.6 w.d= w.p= w.e= w.e= 9.13 3.612 7.609 10.920

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online