WACC and Corporate Investment Decisions

Purpose of Assignment

Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company’s weighted average cost of capital and use the analysis to make company investment decisions.

About Your Signature Assignment

This assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The assignment may be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements.

Assignment Steps

Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft®Office website. There are also additional tutorials via the web that offer support for office products.

Scenario: Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year’s dividend is $2.50 per share that is growing by 4% per year.

Prepare a minimum 700-word analysis including the following:

  • Calculate the company’s weighted average cost of capital. Use the dividend discount model. Show calculations in Microsoft® Word. And Excel.
  • The company’s CEO has stated if the company increases the amount of long term debt so the capital structure will be 60% debt and 40% equity, this will lower its WACC. Explain and defend why you agree or disagree. Report how would you advise the CEO.

Format your paper consistent with APA guidelines.

Submit both word and Excel files.

References and In-text citations according to the APA format guidelines.

You can leave a response, or trackback from your own site.

CLICK ORDER NOW TO GET A CUSTOMIZED PAPER ON THIS TOPIC JUST FOR YOU!! 0%PLAGIARISM 100% ORIGINAL PAPER

12 Responses to “WACC and Corporate Investment Decisions”

  1. 696688 746824Its nearly impossible to discover knowledgeable males and females during this topic, however you sound like do you know what youre discussing! Thanks 725415

  2. 375318 313379There couple of fascinating points at some point in this posting but I dont determine if these folks center to heart. There is some validity but Let me take hold opinion until I check into it further. Excellent write-up , thanks and then we want a lot more! Combined with FeedBurner in addition 68967

  3. fake rolex says:

    766891 229167We are a group of volunteers and opening a new scheme in our community. Your internet internet site given us with valuable info to function on. Youve done an impressive job and our entire community will likely be grateful to you. 310346

  4. 896539 943235An interesting discussion is worth comment. I do believe which you ought to write read much more about this subject, it will not be considered a taboo topic but usually everybody is too couple of to communicate in on such topics. To yet another. Cheers 852521

  5. 849292 436842Hello. Wonderful job. I did not expect this. This is a exceptional articles. Thanks! 271961

  6. DevOps says:

    40859 814605Some truly good stuff on this internet internet site , I like it. 640190

  7. DevOps says:

    999805 251744my English teacher hate me cause i keep writing about somebody from The WANTED called Jay, she gives me evils and low 330686

  8. 960280 704362I appreciate your work , thanks for all of the informative weblog posts. 141034

  9. 534180 395986This is a outstanding weblog, would you be involved in performing an interview about just how you designed it? If so e-mail me! 549523

  10. Antony Kofa says:

    The last step is not the conceptOmega supports 500 OGA 500 OGA 500 OGAGE.

  11. Alan Heap says:

    Switzerland and Japanese artists

  12. elojob says:

    392858 406882The electronic cigarette makes use of a battery and a small heating aspect the vaporize the e-liquid. This vapor can then be inhaled and exhaled 811828

Leave a Reply

Powered by WordPress | Designed by: buy backlinks | Thanks to webdesign berlin, House Plans and voucher codes