# Weighted Average Cost Of Capital Essay Examples

### Marriott Corporation: The Cost Of Capital

4504 words - 19 pages capital for investments of similar risk using the weighted average cost of capital (WACC): WACC = (1 − t)rD (D / V ) + rE (E / V ) 3 This document is authorized for use only by Johnson Lau (johnsonlau@yahoo.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. 298-101 Marriott Corporation: The Cost of Capital where D and E are the market values of the debt and equity, respectively, rD is the pre-tax cost of debt, rE is the after-tax cost of equity, V is the value of the firm ( V = D + E), and τ is the corporate tax rate. Marriott used this approach to determine the cost of VIEW DOCUMENT

### Memo On Ups Cost Of Capital

2071 words - 9 pages | |UPS |Cost of debt=rd(1-T) |Cost of Debt=.038(1-.368) |2.4% | |FDX |Cost of debt=rd(1-T) |Cost of Debt=.05(1-.359) |3.2% | |AAWW |Cost of debt=rd(1-T) |Cost of Debt=.105(1-.386) |6.4% | IV. Weighted Average Cost of Capital A. Inputs |Company |% of Debt |After-tax Cost of |%of Preferred Stock|Cost of Preferred |% of Common Equity |Cost of Common | | |(liabilities/assets) |Debt VIEW DOCUMENT

302 words - 2 pages BGA1 Task 4 308.1.8-05,12 The weighted average cost of capital for this company is 9.48%. Cost of capital is often used in net present value analysis as the discount rate, which is the rate that other investments would return that have similar risks. Cost of capital is the total of all of the actual costs of a company’s debts and equities. These costs include such factors as interest, tax expense, and equity costs. It is what percentage it costs the company to tie up its capital, so in order for an investment to be desirable, it must return a percentage greater than what it takes for the company to cover its capital costs. In a net present value analysis, the cost of capital is VIEW DOCUMENT

### Management Essay

496 words - 2 pages or brokerage fees of owners. It expected to have available RM450,000 of retained earnings in the coming year; once these retained earnings are exhausted, the firm will used new equity as the form of equity financing. (tax rate = 40%) (a) Calculate after tax cost of debt. (6 marks) (b) Calculate cost of preference share. (3 marks) (c) Calculate cost of retained earnings. (7 marks) (d) Calculate cost of new common share. (4 marks) (e) The firm uses the following weights based on target capital structure proportions to calculate its weighted average cost of capital (WACC). What is the firm’s WACC? (5 marks) Source of capital Weight Long-term debt 40% Preference shares VIEW DOCUMENT

### Mini Case (P. 45) Essay

726 words - 3 pages available AFTER the firm has paid all of it’s expenses. g. What is the weighted average cost of capital? The weighted cost of capital is the cost of capital used to analyze capital budgeting decisions is the weighted average of the various components’ costs. h. How do free cash flows and the weighted average cost of capital interact to determine a firm’s value? Free cash flows and the weighted average cost of capital interact to determine a firm’s value through this equation: Value = (FCF1/(1+WACC)1)+ (FCF2/(1+WACC)2) + ...infinity i. Who are the providers (savers) and users (borrowers) of capital? How is capital transferred between savers and borrowers? The provider (saver) of capital would be a household and a user (borrower) of capital wold be a corporation. Capital is transferred between providers and users using banks, investment banking and direct transactions. Source = Brigham, Ehrhardt. Financial Management: Theory & Practice. 13. VitalSource Bookshelf. South Western Educational Publishing, 03/2010 VIEW DOCUMENT

### Capital Budgeting Recommendation For Guillermo Furniture

1044 words - 5 pages present value could not cover the cost of the project. An important factor in the net present value is the discount rate. The present value of the project’s expected cash flows inversely relates to the discount rate. When one goes up the other goes down. Weighted Average Cost of Capital The weighted average cost of capital (WACC) is the weighted average of the required return for equity and the required return for debt. The WACC is the overall required return an organization uses to determine the feasibility of capital projects. WACC is important as a measurement of the bottom line an investment must return to add value for shareholders. Companies with a lower WACC have a VIEW DOCUMENT

### Capital Budgeting Scenarios Paper

573 words - 3 pages Capital Budgeting Scenarios Paper Megan Bailey FIN/486 3/21/2016 Beverley Loyd Capital Budgeting Scenarios Paper The selected proposal to purchase a labor-saving piece of equipment that will last five years assumes the discount rate or the weighted average cost of capital is 10%. Since the labor content is at 12% of \$10 million in annual sales, this can be noted as an annual labor cost of \$1.2 million (10,000,000 x 0.12). The new piece of equipment is expected to save 20% of labor annually, resulting in a \$240,000 reduction in cost each year over the next five years (1,200,000 x 0.20). The cost of the new piece of equipment is \$200,000 VIEW DOCUMENT

### Fdsaf Essay

276 words - 2 pages Long-Term Financing Paper For a publicly traded company, shareholder value is the part of its capitalization that is equity as opposed to long-term debt. In the case of only one type of stock, this would roughly be the number of outstanding shares times current share price. Things like dividends augment shareholder value while issuing of shares (stock options) lower it. This Shareholder value added should be compared to average/required increase in value, also known as cost of capital. For a privately held company, the value of the firm after debt must be estimated using one of several valuation methods, such as discounted cash flow or others. Discounted Cash Flow (DCF) is used to VIEW DOCUMENT

### Acca Essay

2467 words - 10 pages based on the residual income technique that has been used since the early 20th century. Residual income is a performance measure normally used for assessing the performance of divisions, in which a finance charge is deducted from the profits of the division. The finance charge is calculated as the net assets of the division, multiplied by an interest rate – normally the company’s weighted average cost of capital. Example 1 Division A made a profit of \$10,000 during the most recent financial year. The capital used by the division (equity plus long-term debt) was \$70,000. The weighted average cost of capital of the company is 13%, and this is used when calculating the finance charge VIEW DOCUMENT

1076 words - 5 pages Finance Management March 08, 2014 Rodney Schilling Argosy University Professor Charlie Merritt Introduction Argosy wheel industries are considering a three year expansion project. The Schilling Group is hired to evaluate the progression which involves long term opportunities for investment. We will provide a comprehensive report that outlines and illustrates several techniques that will show and evaluate capital projects, methods used for project selection, weighted average cost to the firm and the cash flow that is anticipated for the project. We will also incorporate the risk into the calculations from two projects. In this report we explain our findings VIEW DOCUMENT

### Virtual Marketing

1984 words - 8 pages requires a company to be more careful about resource mobilisation, resource allocation and investment decisions. EVA can also be shown as: EVA = NOPAT – (TCE x WACC) Where, TCE = Total Capital Employed WACC = Weighted Average Cost of Capital While calculating NOPAT, non-operating items like dividend/interest in securities invested outside the business, non-operation expenses etc. will not be considered. The total capital employed is the sum of shareholders funds as well as loan funds. But this does not include investments outside the business. To determine WACC, cost of debt is taken after tax cost and cost of equity is measured on the basis of Capital Asset Pricing Model (CAPM VIEW DOCUMENT

### Cryptography And Politics

418 words - 2 pages NI = Net Income NOPAT = Net Operating Profit after Tax FCFF = Free Cashflow to Firm ΔWCR = Working Capital Requirement PPE=Fixed Assets (?) (PPE= Property Plant and Equipment) Investment-> Fixed Assets AT = Asset Turnover TA = Total Assets S = Sales A = Assets E=Equity FCFF=NOPAT+DA+ΔWCR-Investment WCR = AR+Investment-AP Watch out! ΔWCR = -ΔWCR(math) ROA = Return on Assets WACC = Weighted average Cost of Capital CAPEX = Capital Expenditure (further??) ???DuPont analysis: ROE = Net Margin*AT*(Asset/Equity) Accounts Recievables DE=Total Debt/Equity ROE = NI/Equity TA=TCL+E (true?) or TA=TL+E??? L+E-E=TL L+E=E+TCL+LTD TCL=AP+STD TL=TCL+LTD??? AT = S/TA ROE = NI VIEW DOCUMENT

### Finance

707 words - 3 pages % bonds, 60% common equity and 10% preferred equity, what is the weighted cost of capital of the firm? (10 pts) 5. Should the firm use this WACC for all projects? Explain and provide examples as appropriate. (10 pts) 6. Recompute the net present value of the project based on the cost of capital you found. Do you still believe that your earlier recommendation for accepting or rejecting the project was adequate? Why or why not? (5 pts) VIEW DOCUMENT

### Mr Brian

373 words - 2 pages important purpose is to estimate economic profit, which is in order to judge Helen Buono who is correct or not. According to the case 15, the weighted average cost of capital (WACC) is 9.30% in Exhibit 1 and the capital employed is 16 in Exhibit 3. Along with the formula in this case, which is economic profit equals to (ROC minus Hurdle rate) times capital employed will equal -\$0.032 billions. If the firm to invest assets into both segments, there is 75% invested in the telecommunication services in Exhibit 1, the WACC is should still be 9.30%. According to the same method above, the result is \$0.0448, which is much higher than previous result, so all assets of firm were invested only in the telecommunications segment is best way. VIEW DOCUMENT

### Case

1338 words - 6 pages . Despite the complexity of the calculations involved, the purpose of DCF analysis is just to estimate the money you'd receive from an investment and to adjust for the time value of money. A valuation method used to estimate the attractiveness of an investment opportunity. Discounted cash flow (DCF) analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one. The incremental annual cash flow has shown in table 3 VIEW DOCUMENT

### Efgs

4033 words - 17 pages . Yield to maturity on company debt (Maturity 2025) N | PV | PMT | FV | I/YR | 24 | -\$1228.30 | \$30.00 | \$1000.00 | 3.64% | After tax cost of debt Rd, AT=Rd, BT(1-T)= 9.28% x (1-0.40)= 5.57% VF Corporation’s WACC is 9.05%. This means if VF Corporation is making decision for future, the project’s rate of return must be higher than WACC rate of 9.05% in order to maintain profit. Weighted Average Cost of Capital Component | Value | Weight | Rate | Debt (before tax) | \$4,507,396 | 0.47 | 9.28% | Preferred Stock | 0 | 0 | 0 | Common Equity | \$5,125,625 | 0.53 | 8.84% | Weighted Average Cost of Capital (WACC) | 9.05% | Company Stock Value VF Corporation’s stock VIEW DOCUMENT

### Efe And Ife

1650 words - 7 pages . Weights are industry-specific. Ratings are company-specific. Multiply weights by ratings: Multiply each factor weight with its rating. This will calculate the weighted score for each factor. Total all weighted scores: Add all weighted scores for each factor. This will calculate the total weighted score for the company. You can find more details about this approach as well as about possible values that the EFE matrix can take on the IFE matrix page. EFE matrix example Total weighted score of 2.46 indicates that the business has slightly less than average ability to respond to external factors. (See the page on IFE matrix for an explanation of what category the 2.46 figure falls to VIEW DOCUMENT

### Investment Analysis And Recommendation Paper For Apple Inc

5828 words - 24 pages factors than DDM when determining the value. Considering both CAPM and DDM rely on future assumptions, neither is considered a perfect investment tool. Debt and Equity Determining the company debt, equity, and weighted average cost of capital (WACC) helps determine stock research and provides details into the returns shareholders should expect in the long-term. WACC is the minimum return that company’s need in order to satisfy investors. Additionally, knowing the company’s equity and debt gives insight into what is needed for the company to break even on its investments. The two types of capitals include debt and equity. WACC is used by companies to determine the cost necessary to raise capital VIEW DOCUMENT

### Jetblue Ipo Case

922 words - 4 pages addtional capital. There are two main ways to estimate the value of firm. One is absolute valuation method which including free cash flow to equity method( FCFE ) and free cash flow to firm method( FCFF ). Another one is relative valuation method which uses relative valuation techniques such as price earing ratio( P/E) and EBITDA multiple. In this case, FCFF has been used to estimate the value of the firm. In this case, the financial data from Southwset Airlines has been used to estimate the weighted average cost of capital( WACC ) of JetBlue Airways. This mainly becasue Southwset Airlines belongs to low-fare airlines just as JetBlue Airways, and it has the longest history and grows stably VIEW DOCUMENT

### Project Management

2979 words - 12 pages facilities, capital, personnel, and so forth. Capability- The model should be sophisticated enough to deal with multiple time periods, simulate various situations both internal and external to the project (e.g., strikes, interest rate changes), and optimize the decision. Flexibility – The model should have the ability to be easily modified, or to be self-adjusting in response to changes in the firm’s environment (e.g. tax laws change, new technological advancements alter risk levels, and, above all, the organization’s goals change). Ease of Use - The model should be reasonably convenient, not take a long time to execute, and be easy to use and understand. Cost - Data-gathering and modeling costs VIEW DOCUMENT

1896 words - 8 pages 100 percent equity; thus, there is no interest expense. The company has a 10 percent weighted average cost of capital. The company assigns a 7 percent cost of capital for its low-risk projects, a 10 percent cost of capital for its average-risk projects, and a 13 percent cost for its above-average risk projects. Makaby estimates that this new store has average risk, so therefore the proposed project’s cost of capital is 10 percent. a) What are the project’s after-tax cash flows for each of the four years? b) The CFO estimates that the store can be sold after four years for \$7.5 million. Makaby’s tax rate is 40 percent. What is the store’s after-tax salvage value at t = 4 VIEW DOCUMENT

### Corporate Finance

4966 words - 20 pages Weighted Average Cost of Capital | 412 | 13.10 | Estimating Eastman Chemical's Cost of Capital | 415 | 13.11 | Flotation Costs and the Weighted Average Cost of Capital | 417 | | The Basic Approach | 417 | | Flotation Costs and NPV | 418 | | Internal Equity and Flotation Costs | 419 | | Summary and Conclusions | 419 | | Concept Questions | 420 | | Questions and Problems | 421 | Appendix 13A: Economic Value Added and the Measurement of Financial Performance | 426 | | Mini Case: The Cost of Capital for Goff Computer, Inc. | 426 | PART IV: Capital Structure and Dividend Policy 14 Efficient Capital Markets and Behavioral Challenges 428 14.1 | Can Financing Decisions VIEW DOCUMENT

### Case

1258 words - 6 pages increase in net working capital we look at the difference between current assets and current liabilities from the current year compared to the prior year. Next, we calculated CAPM, the Capital Asset Pricing Model. The formula to computer CAPM is KRF + β (KM - KRF ). To calculate CAPM we need the risk free rate and the market free rate and beta. We are given all three of these variables. The risk free rate for the market is 4.69% and the risk free rate is 4.93% and beta was calculated using the industry average of 1.6. When we input these values we get 12.95% as the equity cost of capital. Then we calculated the weighted average cost of capital (WACC). To compute WACC we used the following VIEW DOCUMENT

### Human Resource

8374 words - 34 pages , moderate) 29. Globalization of the location decision is the result of all of the following except a. market economics b. higher quality of labor overseas c. ease of capital flow between countries d. high differences in labor costs e. more rapid, reliable travel and shipping b (Factors that affect location decisions, moderate) 30. In location planning, environmental regulations, cost and availability of utilities, and taxes are a. global factors b. country factors c. regional/community factors d. site-related factors e. none of the above c (Factors that affect location decisions VIEW DOCUMENT

### Pepsico

2290 words - 10 pages the capital structure of Pepsico and how the choices that the company makes affects their return on investment and their risk profile. The traditional theory of capital structure theorizes, “when the Weighted Average Cost of Capital (WACC) is minimized, and the market value of assets are maximized, an optimal structure of capital exists.” Pepsico analyzes their capital structure annually with their Board, including dividend policies and share repurchase activity. Long-term debt and solvency analysis will also be used to examine their capital structure in terms of financing sources and their ability to satisfy long-term debt and investment obligations. A review of Pepsico’s decisions in VIEW DOCUMENT

### Mine

379 words - 2 pages After computing our weighted mispricing of TIPS for each date in our sample, we noticed that not only did mispricing exist during the crisis period from 2008-2009, but it also reflected throughout the entire sampling period. During the Lehman bankruptcy in 2008, mispricing rose to approximately \$9 while in some other earlier periods, we noticed average mispricing was approximately \$3 and over. With regards to signs of mispricing, there were a few negative mispricing occurrences which only constituted of about 3% of our observation; which we assumed that a significant part of this percentage owed its relevance to the first four pairs of bonds constructed and not errors or outliers. Also, the VIEW DOCUMENT

### Docx

862 words - 4 pages ; v) Launch initiatives to keep rivals off balance; and vi) Grow faster than industry, taking market share from rivals. b) Fortify and defend the strategy. Relates to sealing off areas or cracks that may invite other competitors to attack or challenge the company. i) Increase advertising and research and development ii) Provide higher levels of customer service iii) Introduce more brands to match attributes of rivals iv) Add personalized services to boost buyer loyalty v) Keep prices reasonable and quality attractive vi) Build new capacity ahead of market demand vii) invest enough to remain cost competitive viii) Potent feasible alternative VIEW DOCUMENT

### Final Paper For Accounting 205

2226 words - 9 pages % | 100.00% | 100.00% | 100.00% | 100.00% | Cost of revenue | 74.74% | 74.98% | 75.13% | 75.18% | 75.21% | Gross profit | 25.26% | 25.02% | 24.87% | 24.82% | 24.79% | Operating expenses | | | | | | Sales, General and administrative | 19.21% | 19.08% | 18.94% | 19.18% | 19.25% | Total operating expenses | 19.21% | 19.08% | 18.94% | 19.18% | 19.25% | Operating income | 6.05% | 5.94% | 5.93% | 5.64% | 5.53% | Interest Expense | 0.52% | 0.52% | 0.48% | 0.49% | 0.49% | Other income (expense) | 0.05% | 0.04% | 0.04% | 0.02% | 0.02% | Income before income taxes | 5.58% | 5.46% | 5.49% | 5.18% | 5.07% | Provision for income taxes | 1.80% | 1.78% | 1.70% | 1.70% | 1.69 VIEW DOCUMENT

### Ipo Pricing For Bbc

4358 words - 18 pages a whole and we find that it may be overvalued by the market.   PART I: DCF Valuation In our intrinsic valuation approach, Boston Beer Company’s future free cash flows of the next ten years are projected in the spreadsheet. Present value of the company at the end of 1995 is calculated by discounting ten year’s free cash flows and terminal value by weighted average cost of capital. As we can see from the spreadsheet, the company fair value is \$210.78 million. Subtracting the debt level of \$1.95 million, the equity value is therefore \$208.83 million.  Appendix 1 includes the full valuation model we used. The key assumptions we made and the calculation methods we used are listed as VIEW DOCUMENT

### Finance

1743 words - 7 pages valuation method do you believe most clearly represents the true value of Encore’s Share? (7 Marks) B. Answer the following questions: a. How does a bond issuer decide on the appropriate coupon rate to set on its bonds? Explain the difference between the coupon rate and the required return on a bond. (5 Marks) b. Companies pay rating agencies such as the Standard and Poor Rating Service, to rate their bonds, and the costs can be substantial. However, companies are not required to have their bonds rated in the first place; doing so is strictly voluntary. Why do you think they do it? (5 Marks) Page 3 of 6 QUESTION 2: WEIGHTED AVERAGE COST OF CAPITAL (22 Marks) Defence VIEW DOCUMENT

### Report Ford

3109 words - 13 pages cracked the top 10 list. | 0.05 | 2 | 0.1 | TOTAL | 1.0 | | 2.85 | Total Weighted Score indicates that Ford has above average ability to respond to the external factor. It means that Ford does take advantage of the existing opportunities and minimize their threats. INTERNAL FACTOR EVALUATION (IFE) MATRIX Table below shows the IFE Matrix for Ford. KEY INTERNAL FACTORS | WEIGHT | RATING | WEIGHTED SCORE | STRENGTH | | | | 1. Ford received \$5.9 billion in Energy Department loans to help retool its plants in Illinois, Kentucky, Michigan, Missouri and Ohio to produce 13 fuel-efficient models, including 5,000 to 10,000 electric cars per year starting in 2011. | 0.1 | 4 | 0.4 | 2 VIEW DOCUMENT

### Finance

3188 words - 13 pages ------------------------------------------------- ------------------------------------------------- If the company were to recapitalize, debt would be issued, and the funds received would be used to repurchase stock. PizzaPalace is in the 40 percent state-plus-federal corporate tax bracket, its beta is 1.0, the risk-free rate is 6 percent, and the market risk premium is 6 percent. ------------------------------------------------- a. Provide a brief overview of capital structure effects. Be sure to identify the ways in which capital structure can affect the weighted average cost of capital and free cash flows. Answer: The basic definitions VIEW DOCUMENT

### Marketing Management

289 words - 2 pages Q  T  C How much to order? When to order? What will be the relevant costs?  It measures the effectiveness of inventory management Inventory turns Annual cost of goods sold \$ = _________________________ Average value of inventory \$ For exampleAnnual cost of goods sold – US \$ 1,000,000 Average inventory value : US\$ 100,000 Inventory turns = \$ 1,000,000/ \$ 100,000 = 10 Item Cost- Direct material, direct labor, factory O/H, Transportation, Customs duties, Insurance Carrying Cost- 1. Cost of Capital – Interest paid on the money tied up 2. Storage costs - Space, personnel, and equipment 3. Risk costs- Obsolescence, damage, pilferage, insurance VIEW DOCUMENT

### Client Understanding Paper

1496 words - 6 pages inventory is usually accomplished using one of three methods. FIFO (first in, first out), LIFO (last in, first out), and weighted average. With the FIFO method, the first items purchased would be the first items removed from the inventory. The LIFO method removes the most recently purchased inventory items first. Weighted average is a compromise between FIFO and LIFO.  When weighted average is used the total cost of inventory available for sale is divided by the totally number of units available for sale.  When weighted average is used the cost of goods sold is reflective of the total period’s operations but the inventory valuation is not representative of future cash flows.  Weighted VIEW DOCUMENT

### Learn

293 words - 2 pages Financial Analysis project: Franco Nevada Corp VS. Kinross Gold RSM219H1 A Team assignment L0801 – Instructor Ralph Tassone Amen Hammad- 1000365311 Hao Xu-1000668155 Shaobo Hou- 1000127016 Andrei Baican- 1000589945 Anastasia Ionas- 999896554 Ratio analysis Working capital= current assets- current liabilities Current ratio = current assets current liabilities Inventory turnover = Cost of goods soldAverage inventory Debt to total asset = Total liabilitiesTotal assets Earnings per share ratio = Net earnings available to common shareholdersweighted average number of common share Gross profit margin = Gross profitnet sales VIEW DOCUMENT

### Kelly Services Final

3071 words - 13 pages of their company, as insiders own 76% of voting class B stock; therefore, equity financing is sufficient for them. This is also good for Kelly Services because they are able to share the burden of risk with their investors. WACC and CAPM Weighted Average Cost of Capital (WACC) is the rate that Kelly Services is expected to pay to finance their assets. Since Kelly Services can potentially raise money from many different sources and different securities generate different returns, WACC is used to generate the weighted average of all financing activities. WACC changes based on the capital structure of the firm therefore, minimizing WACC is a good strategy to find the most appropriate VIEW DOCUMENT

3085 words - 13 pages . Estimating the Cost of Capital In order to calculate the cost of capital of Ameritrade we will use the Capital Asset Pricing Model. This model helps estimate the required rate of return of a certain investment for the given risk. In the case of Ameritrade, we can use this method by finding the most accurate risk free rate, market risk premium and asset beta. We can then find the return on assets by using the following formula: Ra= Rf+ βa (Rm-Rf) To find the asset Beta (βa), we need to find the weighted average β of equity and the weighted average β of debt. We consider the β of debt to be 0, as debt has no relationship with market risk and it is evident from the balance sheet VIEW DOCUMENT

### Week 4 Fin 515 Mid Term

2475 words - 10 pages tax rate was 40%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make \$800 of capital expenditures on new fixed assets and to invest \$500 in net operating working capital. What was its free cash flow? A.|\$1,000| B.|\$1,100| C.|\$1,200| D.|\$1,300| E.|\$1,400| 4) For 2005, Bargain Basement Stores reported \$11,500 of sales and \$5,000 of operating costs (including depreciation). The company has \$20,500 of investor-supplied operating assets (or capital), the weighted average cost of that capital (the WACC) was 10%, and the federal-plus-state income tax rate was 40%. What was the firm's Economic Value Added (EVA), i.e., how VIEW DOCUMENT

### Cisco Systems

2628 words - 11 pages , General and administrative | 11720 | 12892 | Total operating expenses | 18862 | 20748.2 | Operating income | 7674 | 8441.4 | | | | | Interest Expense | 628 | 690.08 | Other income (expense) | 779 | 856.9 | Income before taxes | 7825 | 8607.5 | Provision for income taxes | 1335 | 1468.5 | Net income from continuing operations | 6490 | 7139 | Net income | 6490 | 7139 | Net income available to common shareholders | 6490 | 7139 | | | | | Earnings per share | | | | Basic | 1.17 | 1.287 | | Diluted | 1.17 | 1.287 | Weighted average shares outstanding | | | | Basic | 5529 | 6081.9 | | Diluted | 5563 | 6119.3 | | | | | 7. Estimate the cost of VIEW DOCUMENT

### Strategic Management

4114 words - 17 pages of capital (to 2d.p.). (5 marks) b) What impact will each of the following events have on a firm’s weighted average cost of capital? i. The corporate tax rate is lowered. The firm increases its leverage. ii. iii. The firm’s stock price falls dramatically. The Government imposes a stamp duty on the floatation of share. iv. The firm sells a division and replaces it with a less risky project. (10 marks) v. 2 Question 4 Andrea’s Garage decided to acquire a new Computerized Diagnostic Center for its Montego Bay Service center. The Diagnostic Center is estimated to cost \$9,000,000 and an additional \$1,000,000 for installation and training of staff. The present value of the tax write-off VIEW DOCUMENT

### Str 581 Capstone Final Examination Part Two Uop Complete Course Tutorials

1974 words - 8 pages . • when the products are sold. • after each unit is produced. • on production cost reports. Want help? Click to download STR 581 Final Exam Questions With Answers 28. The convention of consistency refers to consistent use of accounting principles: • within industries • among accounting periods • throughout the accounting period • among firms 29. If a company’s weighted average cost of capital is less than the required return on equity, then the firm: • is financed with more than 50% debt • is perceived to be safe • partnership • has debt in its capital structure 30. Your firm has an equity multiplier of 2.47. What is the debt VIEW DOCUMENT

### Insurance

2343 words - 10 pages raising Capital |1 | | |9 |Weighted Average cost of Capital, Optimum Capital Structure, Inventory, Accounts payable, Effect of |2 |1 | | |Inflation on Working Capital Management | | | |10 |Instruments of Long-Term Finance |1 | | |11 |Internal Financing and Dividend Policy VIEW DOCUMENT

### Managerial Economics

2645 words - 11 pages , largely through 100 per cent captive power generation that costs the company 4.5 cents per kilowatt-hour; well below Indian utility costs, and about 30 per cent lower than the global average. Similarly, its capital cost is 25-30 per cent lower than its international peers due to its legendary speed in plant commissioning and its relentless focus on reducing the weighted average cost of capital (WACC) that, at 13 per cent, is the lowest of any major Indian firm. A Bias for Growth Comparing major Indian companies in key industries with their global competitors shows that Indian companies are running a major risk. They suffer from a profound bias for growth. There is nothing wrong with this bias, as VIEW DOCUMENT

860 words - 4 pages Japanese yen and the US dollar, others are pegged, or linked. They may be pegged to the value of another currency, such as the US dollar or the euro, or to a basket, or weighted average, of currencies. * That movement of capital can also increase currency instability because foreign investors could stop investing at any time and withdraw their money, causing the foreign exchange value to quickly plummet. This has happened in countries like Brazil where foreign investors caused the currency value to increase when they invested in Brazilian companies in the early 2000s. This initially created a positive effect for Brazil, but now that foreign investors are withdrawing their money — causing a VIEW DOCUMENT

### Chapter 20 Flash Cards

2250 words - 9 pages 20-1. Which of the following are factors of production? Output in a production function Productivity → Land, labor, capital, and entrepreneurship Implicit and explicit costs | 20-2. The period in which at least one input is fixed in quantity is the: Long run. Production run. → Short run. Investment decision. | 20-3. The change in total output associated with one additional unit of input is the: Opportunity cost of the output. Average productivity. → Marginal physical product. Marginal cost. | 20-4. If a firm could hire all the workers it wanted at a zero wage (i.e., the workers are volunteers), the firm should hire: Enough workers to produce the output where diminishing VIEW DOCUMENT

### Southwestern

744 words - 3 pages Case 1-3: Southeastern University Situation: * Southeastern University was one of the largest universities in the state. * Total enrollment of more than 25000 students and approximately 3500 staff. * Had 12 faculties at the university, over 20 continuing education diploma and certificate programs and 3 affiliated colleges. * Its purchasing department was centralized and it has a detailed policy. * Purchasing director Blake Hyatt, reported to the university’s VP of administration. * Maintained a list of approximately 1200 approved suppliers, adjusted every 3-5 years. * Follows a weighted average vendor selection system * Volume of VIEW DOCUMENT

### Bridgestone Health Care

3904 words - 16 pages Reliance operates during the next year, do some services deserve more attention than others? (Hint: What is their relative contribution to the WACM % and to the total contribution margin? Which services?) 7. How can the budgetary weighted average contribution margin (WACM) percentage be used to help control the actual operations of Reliance? 8. If a budgetary weighted average contribution margin (WACM) percentage has been developed with an expected level of revenue and a planned fixed cost and the budgetary WACM percentage is in fact achieved in the next (future) time period, could the organization still face losses if the total revenue drops below the budgeted level or total fixed VIEW DOCUMENT

### Bill French Case

1479 words - 6 pages applicable. If however, the business produces several products and they have different contribution margin percentages, weighted-average unit contribution for all products rather than the individual unit contribution margin as long as the product mix remains constant. In instance when products have different unit contributions and when the product mix changes, it is applicable to treat each product as a separate entity and this require that all cost of the business be allocated to individual products. The break-even point on such is a the volume at which the total contribution of that product recovers that product’s equitable share of the company’s total fixed costs. VII. ANSWERS TO VIEW DOCUMENT

### Financial Analysis Of Hi-P International

5052 words - 21 pages |1,471,025,707 | |DCF Valuation |1.783059301 | Table 4: Discounted Cash Flow (b) Calculation of weighted average for cost of capital is derived to be 7.66% with cost of equity being 9.43% and cost of debt being 0.40%. For a project to be feasible, not just profitable, Hi-P must generate a return higher than the cost of capital. Based on assumptions of inflation rate of 1% and the terminal year to be at \$91million, a projection of free cash flows is made for a period from Year 2012 to Year 2021. The discounted cash flow and present value of free cash flows result in present value of enterprise value and a subtract of net debt will VIEW DOCUMENT

### The Survey Of Professional Forecasters On Macroeconomic Indicators

4360 words - 18 pages cent) Combined Gross Fiscal Deficit (per cent of GDP) Central Govt. Fiscal Deficit (per cent of GDP) Corporate profit after tax (growth rate in per cent) Repo Rate (end period) CRR (end period) INR/ 1USD (RBI reference rate-end period) T-Bill 91 days Yield (Weighted average cut-off yield) 10 year Govt. Securities Yield (per cent-average) Overall Balance (in US \$ bn.) Export (in US \$ bn.) Export (growth rate in percent) Import (in US \$ bn.) Import (Growth rate in percent) Trade Balance (% of GDP) Invisible Balance (US \$ bn) Current Account Balance (US \$ bn) Current Account Balance (% of GDP) Capital Account Balance (US \$ bn) Capital Account Balance (% of GDP) #: RE; @: Preliminary; BE VIEW DOCUMENT