Financial Analysis on DOMTAR and Kimberly.docx - Financial Analysis on DOMTAR and Kimberly-Clark By Kyle White 2 Table of Contents CAPM

Financial Analysis on DOMTAR and Kimberly.docx - Financial...

This preview shows page 1 - 4 out of 9 pages.

Financial Analysis on DOMTAR and Kimberly-Clark By: Kyle White
Image of page 1

Subscribe to view the full document.

2 Table of Contents CAPM Calculations (using both methods)………………..…………………3 Estimated Market Return for S&P 500 ……………………………………..4 Risk Free Rate……………………………………………………………….4 Dividend Discount Model…………………………………………………...5 Cost of Debt…………………………………………………………………5 WACC (both Calculations)………………... ……………………………….6 Conclusion…………………………………………………………………..8 CAPM
Image of page 2
3 Formula: ? ( ? ? ) = ? ? ( ? ( ? ? ) − ? ? ) + ? ? ? ?= 0.62 ? ?= 2.10 ? ( ? ? )= 0.34 ? ( ? ? )= 0.34 ? ?= 2.42 ? ?= 2.42 KBM: ? ( ? ? )= 113.90% UFS: ? ( ? ? )= -265.04% Above is the calculation for the expected return on an asset also known as CAPM. This formula takes all the past returns, in this case the past 5 years, and estimates the return for the next year. For KBM, they are estimated a 113.90% return which is a very high return especially when its compared to one of its competitors UFS who has a -265.04% return. These are both completely different and shows that KBM has a much better chance for a high return next year. This doesn’t mean UFS is guaranteed to have a negative return next year but based on their
Image of page 3

Subscribe to view the full document.

Image of page 4
  • Spring '14
  • GeraldAbdesaken
  • Interest, Risk-free interest rate, KBM

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes