FIN 370 Week 4 Team Weighted Average Cost of Capital For more course tutorials visit www. uophelp. com
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. Click the Assignment Files tab to submit your assignment. ==================================================
FIN 370 Week 4 Team Weighted Average Cost of Capital For more course tutorials visit www. uophelp. com
Purpose of Assignment Students should understand the mechanics in calculating a company ' s weighted average cost of capital using the capital asset pricing model( CAPM) and its use in making financial investments. 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: You work for an investment banking firm and have been asked by management of Vestor Corporation( not real), a software development company, to calculate its weighted average cost of capital, to use in evaluating a new company investment. The firm is considering a new investment in a warehousing facility, which it believes will generate an internal rate of return of 11.5 %. The market value of Vestor ' s capital structure is as follows:
Source of Capital Market Value Bonds $ 10,000,000 Preferred Stock $ 2,000,000 Common Stock $ 8,000,000