Second Project The purpose of this project is for you to have some practice working with financial concepts in the real world and have to be in excel…

Second Project

The purpose of this project is for you to have some practice working with financial concepts in the real world and have to be in excel sheet.

Second Project

The purpose of this project is for you to have some practice working with financial concepts in the real world.  This will involve integrating some material from throughout the course.  The project will also involve the development of your own approach to doing the work.  The project does not provide a step-by-step procedure for you to follow.

Your task is to determine the WACC for a given firm using what you know about WACC as well as data you can find through research. Your deliverable is to be a brief report in which you state your determination of WACC, describe and justify how you determined the number, and provide relevant information as to the sources of your data.

With the help of your professor, you have selected a company for which to research and find the WACC. Your research is to be independent from any information you may find at thatswacc.com or similar sites although you might want to use such sites to provide a reasonableness check on the WACC you calculate.

Assumptions

As you recall, the formula for WACC is

rWACC = (E/E+D) rE + D/(E+D) rD (1-TC)

The formula for the required return on a given equity investment is

ri= rf + βi * (RMkt-rf)

RMkt-rf is the Market Risk Premium. For this project, you may assume the Market Risk Premium is 4% unless you can develop a better number.

rf is the risk free rate. The YTM on 10 year US Treasury securities is a good approximation.

You may assume a corporate tax rate of 40%.

One good source for financial data for companies as well as data about their equity is http://finance.yahoo.com.  By looking around this site, you should be able to find the market capitalization (E) as well as the β for any publicly traded company.

There are not many places left where data about corporate bonds is still available. One of them is http://finra-markets.morningstar.com/BondCenter.  To find data for a particular company’s bonds, find the Quick Search feature, then be sure to specify corporate bonds and type in the name of the issuing company. This should give you a list of all of the company’s outstanding bond issues. Clicking on the symbol for a given bond issue will lead you to the current amount outstanding and the yield to maturity. You are interested in both. The total of all bonds outstanding is D in the above formula.

If you like, you can use the YTM on a bond issue that is not callable as the pre-tax cost of debt for the company.

Deliverable

Write a two or three page report that contains the following elements:

Your calculated WACC.How data was used to calculate WACC. This would be the formula and the formula with your values substituted.Sources for your data.A discussion of how much confidence you have in your answer. What were the limiting assumptions that you made, if any.

.  This will involve integrating some material from throughout the course.  The project will also involve the development of your own approach to doing the work.  The project does not provide a step-by-step procedure for you to follow.

Your task is to determine the WACC for a given firm using what you know about WACC as well as data you can find through research. Your deliverable is to be a brief report in which you state your determination of WACC, describe and justify how you determined the number, and provide relevant information as to the sources of your data.

With the help of your professor, you have selected a company for which to research and find the WACC. Your research is to be independent from any information you may find at thatswacc.com or similar sites although you might want to use such sites to provide a reasonableness check on the WACC you calculate.

Assumptions

As you recall, the formula for WACC is

rWACC = (E/E+D) rE + D/(E+D) rD (1-TC)

The formula for the required return on a given equity investment is

ri= rf + βi * (RMkt-rf)

RMkt-rf is the Market Risk Premium. For this project, you may assume the Market Risk Premium is 4% unless you can develop a better number.

rf is the risk free rate. The YTM on 10 year US Treasury securities is a good approximation.

You may assume a corporate tax rate of 40%.

One good source for financial data for companies as well as data about their equity is http://finance.yahoo.com.  By looking around this site, you should be able to find the market capitalization (E) as well as the β for any publicly traded company.

There are not many places left where data about corporate bonds is still available. One of them is http://finra-markets.morningstar.com/BondCenter.  To find data for a particular company’s bonds, find the Quick Search feature, then be sure to specify corporate bonds and type in the name of the issuing company. This should give you a list of all of the company’s outstanding bond issues. Clicking on the symbol for a given bond issue will lead you to the current amount outstanding and the yield to maturity. You are interested in both. The total of all bonds outstanding is D in the above formula.

If you like, you can use the YTM on a bond issue that is not callable as the pre-tax cost of debt for the company.

Deliverable

Write a two or three page report that contains the following elements:

Your calculated WACC.How data was used to calculate WACC. This would be the formula and the formula with your values substituted.Sources for your data.A discussion of how much confidence you have in your answer. What were the limiting assumptions that you made, if any.

Amazon Company has the following capital structure.SourceDebenturesPreference capitalRetained earningsOrdinary share capital20,000,000The component costs of capital are; kd is 6%, kp…

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.