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Buy here: http:// student. land / fin-370-week-4-assignment-weightedaverage-cost-of-capital /
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