Weighted Average Cost of Capital ความรู้เกี่ยวกับวิชา "การเงินธุรกิจ" • WACC หรือ Weighted Average Cost of Capital ก็คือ ต้นทุนทางการเงินเฉลี่ยของกิจการต่าง ๆ ซึ่งประกอบไปด้วย ต้นทุนของเงินกู้ยืม (Cost of debt) และต้นทุนส่วนของผู้ถือหุ้น (Cost of equity) • หน้าที่หลักของผู้บริหารการเงินก็คือ ต้องพยายามบริหาร WACC ให้มีค่าต่ำ ที่สุด ซึ่งโดยทั่วไป ต้นทุนของเงินกู้ยืม จะมีค่าต่ำกว่าต้นทุนของส่วนของ ผู้ถือหุ้นค่อนข้างมาก ดังนั้น บริษัทใดก็ตามมีโครงสร้างทางการเงินที่สามารถกู้ยืมเงินได้ในระ ดับที่เหมาะสมกับฐานะการเงินย่อมจะทำให้
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CHRIST UNIVERSITY BANGALORE IV BBA B ASSIGNMENT DATE OF SUBMISSION: 25.02.2011- FRIDAY 1.a) X Ltd. issues Rs.50‚000 8% debentures at par. The tax rate applicable to the company is 50%. Compute the cost of debt capital. b) Y Ltd. issues Rs.50‚000 8% debentures at a premium of 10%. The tax rate applicable to the company is 60%. Compute cost of debt capital
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flow of $400‚000 is expected to grow at a constant rate of 5%. The weighted average cost of capital is WACC = 12%. Calculate EMC’s value of operations. FCF = $400‚000 g = 5% WACC = 12% Vop = PV of expected future free cash flow Vop = = = $6‚000‚000 (13-3) Horizon Value Current and projected free cash flows for Radell Global Operations are shown below. Growth is expected to be constant after 2012‚ and the weighted average cost of capital is 11%. What is the horizon (continuing) value at
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firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? Definition of WACC (Weighted Average Cost of Capital): WACC is basically the average of the cost of finance (debt and equity). Since a company’s assets can be financed by debt or equity‚ WACC can show the averages of the costs involved in the sources of financing. These costs are then weighted by the users of the information as required in a specific situation. This shows how much both debt holders expect
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Finance 486 Final Exam 1. Income Statement Preparation - 25 points a. Prepare an income statement for Cathy Chen‚ CPA‚ for the year ended December 31‚ 2009 Cathy Chen‚ CPA Income Statement for the Year Ended December 31‚ 2009 | Sales revenue | | $360‚000 | Less: Operating expenses | | | Salaries | 180‚000 | | Employment taxes and benefits | 34‚600 | | Supplies | 10‚400 | | Travel & entertainment | 17‚000 | | Lease payment | 32‚400 | | Depreciation
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FIN400 M1 – M5 Quiz M1 - Quiz 1. A firm has an ROE of 14% and a debt ratio of 40%. If the total asset turnover is 3.4‚ what is the firms profit margin? Ans – 2.47% 2. Which of the following statements is incorret? Ans – The over the counter market operates in a fixed location to conduct trades for local stocks. 3. All the following are are secondary market transactions except? Ans – GE sells $30 million of new preferred stock 4. Firm A and Firm B have the same total assets‚ ROA and profit
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discount rates of less than 11.7 percent. The results concluded from the sensitivity analysis made Kimi Ford unsure of her decision on Nike stock; she proceeded to ask Joanna Cohen to estimate Nike’s weighted average cost of capital. IV. Constraints on Solution Cohen calculated a weighted average cost of capital of 8.4 percent by using the capital asset pricing model for Nike Inc. Cohen’s calculations are incorrect because she used the book value for both debt and equity. When calculating cost
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Chapter 10 The Cost of Capital LEARNING OBJECTIVES After reading this chapter‚ students should be able to: • Explain what is meant by a firm’s weighted average cost of capital. • Define and calculate the component costs of debt and preferred stock. • Explain why retained earnings are not free and use three approaches to estimate the component cost of retained earnings. • Briefly explain why the cost of new equity is higher than the cost of retained earnings‚ calculate the
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Hill Country Snack Foods is a company which produce variety of snacks. Their operating strategy is a combination of good products‚ efficient and low-cost operation‚ and singular management. * Good products are not only about high quality‚ but also about to satisfy different type’s customers by producing many kinds of snacks. Customers are satisfied by companies’ quick react to their requirements or preferences and reinvent and expand its products. For example‚ the company has also tried to change
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chlorate companies. The average unleveraged beta obtained from the two companies is 1.035 which reflects the risk of the project. Adjusting Dixon’s beta by re-levering it using its own target capital structure of 35% ends with a beta of 1.59. The beta obtained is used to derive the CAPM method‚ resulting in a 21.45% cost of equity. We assumed that the debt borrowed by Dixon has a rate of 11.25% calculating an after-tax cost of debts of 5.85%. Therefore‚ the weighted average cost of capital (WACC)
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