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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