FIN 370 Week 4 Weighted Average Cost of Capital The Latest Version//tutorfortune.com
FIN 370 Week 4 Weighted Average Cost of Capital The Latest Version//tutorfortune.com Click on below link to buy https://tutorfortune.com/products/fin-370-week-4-weighted-average-cost-of-capital-the-latest-version FIN 370 Week 4 Weighted Average Cost of Capital The Latest Version Purpose of Assignment Students should understand the mechanics in calculating a companyu2019s 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 Excelu00ae and Word functions can be found on the Microsoftu00aeOffice 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 Vestoru2019s capital structure is as follows: Source of Capital Market Value Bonds $10,000,000 Preferred Stock $2,000,000 Common Stock $8,000,000 To finance the investment, Vestor has issued 20 year bonds with a $1,000 par value, 6% coupon rate and at a market price of $950. Preferred stock paying a $2.50 annual dividend was sold for $25 per share. Common stock of Vestor is currently selling for $50 per share and has a Beta of 1.2. The firmu2019s tax rate is 34%. The expected market return of the S&P 500 is 13% and the 10-Year Treasury note is currently yielding 3.5%. Determine what discount rate (WACC) Vestor should use to evaluate the warehousing facility project. Assess whether Vestor should make the warehouse investment. Prepare your analysis in a minimum of 700 words in Microsoftu00ae Word. Use Microsoftu00ae Word tables in the presentation if you choose. Show all calculations and analysis in the presentation. Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. Note: Grades are awarded based upon individual contributions to the Learning Team assignment. Each Learning Team member receives a grade based upon his/her contributions to the team assignment. Not all students may receive the same grade for the team assignment. FIN 370 Week 4 Weighted Average Cost of Capital The Latest Version Click on below link to buy https://tutorfortune.com/products/fin-370-week-4-weighted-average-cost-of-capital-the-latest-version
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