Nike Wacc: September 2013 Find the Values of the Components in the Capital Structure E = 890.35M shares $65.40 = $58,228.89 million P = N/A L= 1447.358M B = 826.041M V = 58,228.89M + 826.041M + 0 + 1447.358M= $60,502.289M Find the Weights of the Components in the Capital Structure E/V = 58,228.89/60,502.289= 0.962 B/V = 826.041/60,502.289 = 0.0137 L/V = 1447.358/60,502.289 = 0.0239 Find the Component Marginal Costs of Capital kd = 0.0769 {see table} ke = rf + β(km - rf) = 0.0389 +
Words: 1239 - Pages: 5
Colby Wagoner Cost of Capital Project(WACC) FIN 4422 T: 7:10-10 1. Marginal Cost of Debt: Kd= rf + Spread Kd= .0295(or 2.95%) + .0577(or 5.77%)= .0875(or 8.75%) 2. Marginal Cost of Equity: Ke= Kd+Risk Premium Risk Premium for choosing to invest in a more risky asset, the premium will be set at 10% due to the the falling stock price and ROE has dropped to -200% making the risky stock unappealing so setting the premium as high as I did should influence investors. Ke= .0875+
Words: 581 - Pages: 3
concerning WACC: 1. What is the WACC of the company? The WACC for Verizon Communications Inc. is 4.74% 2. What does WACC represent to the firm? The WACC is the rate that a company is expected to pay on average to all its security holders to finance its assets. It is the rate of return required by investors. Investors use WACC as a tool to value a project. If the project is below WACC, it will not generate enough return for the Investor. 3. How does Beta influence the WACC? Beta represents
Words: 530 - Pages: 3
Ugochukwu Mbagwu Brad Koman Dr. Yufeng Han BUSN6640 WACC Project Write-up Introduction: The Hewlett-Packard Company, which is a technology corporation in California, specializes in developing and developed computing, storage, network hardware, software and services. The main product lines contain personal computing hardware, activity servers and linked storage. This enterprise is one of the biggest technology companies in the world. We chose Hewlett Packard because of their significant
Words: 2351 - Pages: 10
OF CAPITAL (WACC) 3 WACC Formula: E /V * Re + D/V *Rd * (1-Tc) 3 DEMONSTRATION OF APPLICATION KNOWLEDGE 55% 5 Describe capital structure 5 Indicate how these might be useful to determine the feasibility of the capital project 5 Recommend which is more appropriate to apply to project evaluation. 5 Define marginal cost of capital 5 ACADEMIC WRITING 20% 7 References 7 Footnotes 8 Tables 9 Figures 10 TASK REQUIREMENT 25% WEIGHTED AVERAGE COST OF CAPITAL (WACC) WACC Formula: E
Words: 908 - Pages: 4
model and the weighted average cost of capital through calculation of the cost of capital for Marriott as a whole. Dan Cohrs is faced with making recommendations for the hurdle rates at Marriott Corporation and its three divisions utilizing CAPM and WACC. This case illustrates how to calculate beta based on comparable companies and to lever betas to adjust for capital structure; the appropriate risk-less rate and market risk premium; the choice of time period to estimate expected returns and the difference
Words: 2535 - Pages: 11
BUS 5440 Google WACC Project Click Link Below To Buy: http://hwcampus.com/shop/bus-5440-google-wacc-project/ Google WACC Project In this project, you will find and discern the appropriate data to determine a realistic assessment of the weighted average cost of capital for Google. You will need to search for data from several sources, use subjective judgment to determine which data to use or discard, use subjective judgment to determine which calculation gives a more acceptable estimate
Words: 447 - Pages: 2
Average Cost of Capital (WACC) from financial statement By waccawacca, eHow Member User-Submitted Article A firm's WACC (Weighted Average Cost of Capital) reflects the average 'cost' for a firm to raise capital. The WACC is one of the most fundamental economic measures of a company, as all typical investment projects undertaken by the firm should earn a return AT LEAST as high as the firm's WACC. Otherwise, the firm is destroying value. This eHow will summarize the WACC formula, and then step you
Words: 690 - Pages: 3
WACC AND DCL CALCULATION OF ASHOK LEYLAND Part 1: WACC CALCULATION WACC is the rate that a company is expected to pay on average to all its security holders to finance its assets. It is the minimum acceptable return that a company must earn on an existing asset base to satisfy its stakeholders. Calculation of WACC as on 31st March 2012 Total Debt of the company = Rs 2395.53 Cr Interest = 255.25 Cr Rs. The cost of Debt before tax = Interest/Tax *100 = 10.65 Now, Tax% = Tax/PBT = 124/689.97 = 0.1797
Words: 502 - Pages: 3
Question 1. Identify the components of a stock's realized return. The two main components of a realized return or two sources are the dividend and the change of price during the period, in other words if you buy stock for x amount of money, at a later time all the money that you have received is your return realized and is the real cash flow of the stock realized return ,also in a different view on the realized return components , Problem ,Plan Execute ,Evaluate . Question
Words: 545 - Pages: 3
