FIN 370 help A Clearer path to student success/uophelp.com FIN 370 help A Clearer path to student success/uop | Page 35

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