FIN_305W_-_Paper_Project - Paper project FIN 305W Financial...

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1 Paper project FIN 305W Financial Management of the Business Enterprise Lukas Roth Requirements > Paper that shows how you go about calculating the WACC for a company of your choice > You can choose any company included in the S&P 100 index that has a non-trivial amount of debt > A good paper includes: Lukas Roth FIN 305W 2 Cover page with your name and name of the company Brief description of the company, motivation Detailed description of how you calculate the WACC and what assumptions you need to make to compute: Cost of debt, cost of equity, beta WACC Appendix that shows important calculations, tables, and figures Reference section Requirements > Style requirements: 4 to 5 pages text; this doesn’t include the cover page, the reference section, nor the appendix Appendix: max. 5 pages 12pt font, 1.5 line spacing, 1” margins Lukas Roth FIN 305W 3 > Grades will be based on: Clarity of the presentation and writing Calculation of the WACC Compliance with the style requirements > Data sources: Yahoo finance, MSN Money, Bloomberg
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2 Outline Example firm: Goodyear Tire & Rubber Co. (Ticker: GT) Information we need to estimate the WACC: DE Lukas Roth FIN 305W 4 > Cost of debt (r D ), debt value (D) > Cost of equity (r E ), equity value (E) ++ WACC r r Debt value > Market value of outstanding short- and long-term debt > Include only interest bearing items; we are interested in how the company is financed >
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This note was uploaded on 04/06/2010 for the course FIN 305W at Pennsylvania State University, University Park.

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FIN_305W_-_Paper_Project - Paper project FIN 305W Financial...

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