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