Part 3 - Part 3: Weighted Average Cost of Capital Estimate...

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Part 3: Weighted Average Cost of Capital Estimate and Capital Project Analysis due by 11:45 PM CT Saturday, July 30. 1. For your company, estimate the weighted-average cost of capital (WACC) under a variety of assumptions, and explain. Your work from Part 2 of the project can help you with estimating the This should include the following: a. Estimate the cost of new long-term debt financing. b. Estimate the cost of retained earnings using both methods discussed in class. c. Estimate the market value financing proportions you think the company would use to raise new capital. Using long-term debt from your company’s most recent balance sheet is ok, but use the market value of your company’s common stock (market capitalization) to help your group find these financing proportions d. Choose and explain your final component cost of capital estimates and calculate your company’s WACC. 2. A capital budgeting project proposal will be given to your group by July 19. You will have to write up a report where you
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This note was uploaded on 08/04/2011 for the course BUS 101 taught by Professor Kuhns during the Spring '11 term at Renmin University of China.

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