[pic] EnCana Corporation -Cost of Capital Nabil Naouli Yong Peng Ahmed Alenazi Raj Kancharapu Table of Contents 1. Introduction 2 2. History 2 a. Top Competitors 4 b. Major Product and Services 5 c. SWOT Analysis 5 3. Calculating Cost of Capital 6 a. Calculating Cost of Equity 7 i. Risk free rate 7 ii. Market Risk Premium 8 iii. Beta 8 b. Calculating Cost of Debt 9 c. Weighted Average Cost of Capital ( WACC ) 10 d. WACC- EnCana Corp. 2010 12 4. Discussion
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Audit Quality and Cost of Debt Capital for Private Firms: Evidence from Finland Jukka Karjalainen Department of Business University of Eastern Finland April 10‚ 2010 Abstract The purpose of this paper is to examine the value relevance of the perceived audit quality in terms of who audits‚ as well as the audit outcomes in terms of the auditor’s opinion and accruals quality‚ in the pricing of debt capital for privately-held firms by examining a large sample of privately-held Finnish firms. The
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determined. Ameritrade’s managers should also consider what taking on these programs would do to its capital structure. They might have a certain debt to equity ratio they wish to maintain‚ or perhaps there would be covenants put on their contracts requiring them to maintain a certain debt to equity ratio while their loan was outstanding. Ameritrade should use a 6.10% risk free rate when calculating its cost of capital. This is the average of the 20 year bond annualized yield to maturity (on
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to compute the WACC of Marriott Corporation and each of the company’s three divisions. Our approach is outlined in the next section. We made a series of assumptions regarding either the available data or the missing information. This has been explained below‚ in a separate section. Approach We applied the following formulae to calculate the WACC: Our assumptions are explained in the next section. The table below presents the approach for calculations at corporation level and division
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Target Corporation‚ Target‚ is an exclusive retail discounter that provides on-trend‚ high quality merchandise at competitive prices in orderly and expansive guest-friendly stores. In addition to the retail stores‚ Target operates an online business‚ Target.com (Target.com‚ 2012). Target Corporation (NYSE:TGT) assists customers at 1‚763 stores across the United States and also at Target.com. In 2013 the organization is planning to open their first stores in Canada. In addition to the retail segment
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brokerage sector. In march 1997‚ Ameritrade raised $22.5 million in an initial public offering. Management at Ameritrade is considering substantial investments in technology and advertising‚ but is unsure of the appropriate cost of capital. Estimating the cost of capital 1. Since we do not have the beta for Ameritrade‚ we need to find comparable firms for which we could compute the betas. There are several candidates in the case. Discuss which firms are most appropriate. Thus‚ the proportion
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Classify each cost listed below as either a product cost or a period cost for purposes of preparing the financial statements for the bank. 1. The cost of the memory chips used in radar set. * Product Cost 2. Factory Heating Cost * Period Cost 3. Factory Equipment maintenance costs. * Period Cost 4. Training costs for new administrative employees * Period Costs 5. The cost of the solder that is used in assembling the radar sets. * Product costs 6. The Travel
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What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? 1.1 The definition of WACC Weighted average cost of capital(WACC)‚ is a weighted-computational method of analyzing the cost of capital based on the whole capital structure of a firm. The result of WACC is the rate a firm use to monitor the application of the current assets because it represents the return the firm MUST get. For example this rate could
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INTRODUCTION Bank Negara Malaysia (BNM) reported in its Annual Report 2010 that household debt was RM581 billion. It represents 76% of Gross Domestic Product (GDP). This scenario arises because Malaysian spend on avarage almost half of their income to pay off their debts. Only a minimum amount is left to be spent on children education‚ food‚ transport‚ health or even emergencies. If the breadwinner lose his job or passed away‚ the family will find it difficult to take over the responsibility
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planned to increase revenues by developing athletic-shoe products in ranges varying between $70-$90 and push their apparel line. Nike’s executives expressed that the company would still continue with a long-term revenue growth target of 8-10 percent and earnings-growth target above 15 percent. III. Statement of Situation After reading all the analysts’ reports‚ Kimi Ford decided to develop her own discounted-cash-flow forecast to achieve the investment decision for her mutual fund. The forecast
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