Using the publicly available data‚ we estimated the weighted average cost of capital of the AMD and Duke Energy. For the AMD‚ the WACC is 10.83%. For Duck Energy‚ the WACC is 2.76% When we calculate those number‚ we need to know the equity and debt of the company which can easily find on yahoo finance. The cost of debt and the corporate tax rate that we calculated are also based on the data from yahoo finance. We made Beta for the companies with 10 year ranges and use it to calculate return of
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to choose from. However‚ the one that would most likely stand out is the ‘Heinz’ ketchup bottle. The Heinz ketchup bottle has been out for years and it has so much history behind the name. Henry John Heinz didn’t start out with ketchup; he actually started out with bottled horseradish. A lot of people don’t know that but H.J. Heinz accomplished a lot in his career which goes hand in hand in the world of marketing. H.J. Heinz as we all know is known for the bottle ketchup which was first called “catsup”
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As Don Draper said in the popular AMC TV show Mad Men‚ “It’s Heinz. It only means one thing.” Draper was right. When you think of Heinz‚ do you not immediately think of ketchup? Unfortunately‚ Draper’s advertising pitch was turned down in this fictional TV show – but that didn’t stop the actual Heinz company from using his pitch idea 4 years later. The Heinz marketing team paired up with the TV show to use their creative‚ yet impactful ad as their newest way to draw in new consumers. The ad features
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Case analysis "Cost of Capital at Ameritrade" Cost of capital refers to the maximum rate of return a company must earn from its investments‚ so that the market values of the company’s equity shares do not go down. The people at Ameritrade are not in agreement on the best estimate of the cost of capital. Research analyst put the cost of capital at 12%‚ while other members of the management estimate it to be at 9% and the CFO estimates it to be at 15%. The CEO of the company is optimistic that
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The Oceanic Corporation (Determining the Cost of Capital) Larry Stone wants to estimate the firm’s hurdle rate because it is a benchmark for how well the company needs to do on a project in order to at least break even. The higher the hurdle rate‚ the riskier the project will have to be and the lower the hurdle rate is‚ the safer the project will be for a company. A company should strive for a financing mix that minimizes the hurdle rate and matches the assets being financed. If there
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agency problems on the cost of capital Tung-Hsiao Yang* Current Version: September 10‚ 2008 * Assistant Professor of Finance‚ National Chung Hsing University‚ Department of Finance‚ No. 250‚ Kuo Kuang Rd.‚ Taichung 40227‚ Taiwan‚ tyang1@nchu.edu.tw. The author thanks National Science Council for financial support in this project‚ NSC96-2416-H-005-026. The Impact of two agency problems on the cost of capital Abstract We test the relation between the cost of capital and two agency problems
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WACC Weighted Average Cost of Capital Formula The WACC Weighted Average Cost of Capital formula is complex‚ and can be broken into several components. The individual component costs are provided in the following sections. WACC Weighted Average Cost of Capital Variables V=Firm Total Value (Debt + Preferred Shares + Common Equity + Retained Earnings) Md=Market Value of Debt Mp=Market Value of Preferred Shares Mc=Market Value of Common Equity Mr=Market Value of Retained Earnings K=Current
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CHAPTER 9 THE COST OF CAPITAL (Difficulty: E = Easy‚ M = Medium‚ and T = Tough) Multiple Choice: Problems Easy: Cost of common stock Answer: d Diff: E [i]. Bouchard Company ’s stock sells for $20 per share‚ its last dividend (D0) was $1.00‚ and its growth rate is a constant 6 percent. What is its cost of common stock‚ rs? a. 5.0% b. 5.3% c. 11.0% d. 11.3% e. 11.6% Cost of common stock Answer: b Diff: E [ii]. Your company ’s stock
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Midland Energy Resources‚ Cost of Capital The case is about how Janet Mortensen‚ senior vice president of project finance for Midland Energy Resources‚ prepare her annual cost of capital estimates for midland and each of its three divisions for her company. Midland was a global energy company with operations in oil and gas exploration and production (E&P)‚ refining and marketing(R&M)‚ and petrochemicals. Estimates of cost of capital prepared by Mortensen were used in many analyses within
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Essay on Responding to H. J. McCloskey’s On Being an Atheist by Reed Harvey Philosophy and Contemporary Ideas Instructor: C. Wayne Mayhall Due – August 17‚ 2012 Liberty University This paper seeks to clarify whether the claims and proofs presented by McCloskey’s article “On Being an Atheist” provide sufficient ammunition to dissuade people from maintaining their belief in God. It was McCloskey’s intent to systematically discredit God and show that life without God is a better
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