# Essays Tagged: "WACC"

#### Nike, Inc.

new analysis.Cohen's first mistake was to use Nike's book value of equity in her calculation of the WACC; \$3,494.50. Though the book value is an accepted estimate of the debt value, the equity's book ... itself, the cost of capital is the weighted average of each. After inputting these figures into the WACC we get a cost of capital equivalent to 9.68%.2002200320042005200620072008200920102011Total CF76 ...

(5 pages) 876 0 5.0 Apr/2004

#### FINANCIAL ANALYSIS OF SEARS VS. WAL-MART

cial Ratio analysis--------------------------------------------- 4Weighted Average Cost of Capital (WACC)--------------------- 12Working Capital Management--------------------------------------20Divid ... t. But Wal-Mart is more active, it wants to open new market, so it keeps enough money to investment.WACC Analysis- Weighted Average Cost of CapitalWhy Use WACC? Corporations create value for sharehold ...

(21 pages) 907 0 5.0 Oct/2004

#### Nike vs. Reebok Financial Results Analysis (Fiscal Year 1998-2002)

-------------------------------------- 3II. Financial Ratios Analysis ----------------------- 3III. WACC Analysis ----------------------------------- 9IV. Working Capital Management ------------------ ... .0% 22.0% 0.0% 23.0% 0.0% 30.2% 0.0%SGR 11.9% 14.3% 13.9% 14.3% 13.2% 13.3% 14.2% 2.1% 9.5% 4.6%III WACC analysisWhy Use WACC?The Weighted-Average Cost of Capital Method is a modern method of valuing ...

(19 pages) 344 0 5.0 Oct/2004

#### The Right Mix- Debt vs. Equity

, while determining the right debt-equity combination and optimal Weighted Average Cost of Capital (WACC). Students were given ownership of an extremely popular coffee shop named, "El Café." Th ... for capital while selecting a debt-equity mix that minimized the Weighted Average Cost of Capital (WACC). The selection of a capital structure with 70 percent debt ratio allowed "El Café" to a ...

(3 pages) 361 0 0.0 Mar/2006

Subjects: Businesss Research Papers > Case Studies

#### Debt-Equity Mix Simulation: El Caf

ion provided by the University of Phoenix, I was asked to use the Weighted Average Cost of Capital (WACC), to find the optimal debt-equity mix for a café business known as El Café. Durin ... interest loans and change my debt-equity mix to 70-30%. By using this mix, I was able to achieve a WACC (Weighted Average Cost of Capital) of 8.65%.What is WACC? Generally speaking, a company's asset ...

(3 pages) 460 1 3.9 Mar/2006

Subjects: Businesss Research Papers > Case Studies

#### Fonderia di Torino S.P.A. Case Study

04 = -813,296Appropriate discount rateRs = Rf+B(Rm-Rf)=5.3%+1.25*6%=12.8%Rb = 6.8%*(1-0.43)= 3.88%R(wacc) = (33%)*(3.88%)+(67%)*(12.8%)= 9.86%Net Present ValueSince we are not provided with the inform ...

(4 pages) 662 2 2.5 May/2006

Subjects: Businesss Research Papers > Case Studies

#### Marriot Corporation Cost of Capital

debt in the capital structure and repurchasing undervalued shares. If the company uses its overall WACC it may have divisions accept projects with returns below their respective WACC which will resul ... respective WACC which will result in losses and vice versa.2.The Weighted Average Cost of Capital (WACC) is as average that reflects the expected return on all of a companies securities. For the WACC ...

(4 pages) 617 0 2.3 Jul/2006

Subjects: Businesss Research Papers > Case Studies

#### Determining the Debt-Equity Mix

erent capital structure concepts addressed in the simulation by answering the two questions: why is WACC important to an organization and what impact does WACC have on capital budgeting and structure? ... inancing for two additional shops. The objective was to select a debt-equity mix that minimized the WACC. The recommended solution is to obtain a debt-equity mix of 70 - 30% which achieved the lowest ...

(3 pages) 928 0 3.4 Aug/2006

Subjects: Businesss Research Papers > Accounting

#### Nike Inc.: Cost of Capital

t in such decisions and it is important to estimate precisely the weighted average cost of capital (WACC).In our analysis, we examine why WACC is important in decision making and we show how WACC for ... ghted Average Cost of Capital and its Importance for Nike Inc.The Weighted Average Cost of Capital (WACC) is the average of the costs of a company's sources of financing-debt and equity, each of which ...

(9 pages) 960 1 4.6 Oct/2006

#### Determining the Debt-Equity Mix: El Caf

erent capital structure concepts addressed in the simulation by answering the two questions: why is WACC important to an organization and what impact does WACC have on capital budgeting and structure? ... financing for two additional shops. The objective is to select a debt-equity mix that minimized the WACC. The recommended solution is to obtain a debt-equity mix of 70 - 30% which achieved the lowest ...

(3 pages) 414 0 2.6 May/2007

Subjects: Businesss Research Papers > Case Studies

#### Debt-Equity Mix Simulation

t I could make investment decisions. The goal was to optimize the Weighted Average Cost of Capital (WACC) for the business so that I could lead the business to success. Following are the situations th ... g the business in a very competitive market. In order to be successful at expansion I needed to use WACC as a benchmark to decide the optimal debt-equity mix. Finding the right mix would help me minim ...

(3 pages) 406 1 5.0 Sep/2007

Subjects: Businesss Research Papers > Accounting

#### Debt-Equity Mix Simulation Summary

ant role for a company to achieve a stable capital structure. The Weighted Average Cost of Capital (WACC) helps a company to find the appropriate proportion of debt and equity and provides the overall ... l for the company. (Financial Analysis, 2007). There is no "one size fits all" approach to applying WACC. The most appropriate decision can change with the situation, and a drastic modification of the ...

(4 pages) 153 0 4.0 Nov/2007

#### Lester Electronics Financing Alternative Benchmark

pany's revenues.Determine the Weighted Average Cost of CapitalThe weighted-average cost of capital (WACC) is a formula that helps a company to find out how much the company is spending on interest on ... nd preferred, as well as bonds. Each financing activity whether from debt or equity has a cost. The WACC formula helps a company as well as creditors and investors to see how much the finance activiti ...

(25 pages) 286 0 4.0 Jan/2008

#### Debt/Equity Mix Simulation

in this simulation. This paper will address the importance of the weighted-average cost of capital (WACC) to an organization, the impact of WACC on capital budgeting and structure, and the risks and u ... ty.The first scenario asked for the appropriate debt-equity mix to finance the expansion, using the WACC as the benchmark. The recommended solution was to take the debt-equity ratio to 70% debt - 30% ...

(4 pages) 203 1 4.6 Apr/2008

Subjects: Businesss Research Papers > Accounting

#### Lester Electronics Financing Alternative Benchmarking MBA 540 week 5

policies.Weighted Average Cost of Capital (Cathy Billingslea)The weighted-average cost of capital (WACC) is a formula that helps a company determine the amount spent on interest for all financial end ... stockholder's equity and bonds. Each financing activity whether from debt or equity has a cost. The WACC formula helps a company, as well as creditors and investors, see how much each finance activity ...

(23 pages) 154 0 5.0 Feb/2009

Subjects: Businesss Research Papers > Case Studies

#### DCF analysis (UNSW fins3625 assignment)

e future free cash flow projections (which requires estimations of future revenues and costs) using WACC.•While multiples analysis uses data from the past and current where most of its figures ar ... h could be minimized had she performed a multiple regression analysis.DCF and its assumptionsSingle WACC of 9.3%: DCF analysis usually discounts cash inflows and outflows at the same rate, however, wh ...

(9 pages) 70 0 1.0 Apr/2009

Subjects: Businesss Research Papers > Case Studies

#### Stern Stewart & Co and EVA development

ax and the opportunity cost of invested capital. Weighted average cost of Debt and Equity Capital ("WACC") and the amount of Capital employed is how the opportunity cost is determined. EVA is a way of ...

(3 pages) 20 1 0.0 Nov/2009

Subjects: Businesss Research Papers > Management

#### Guillermo Furniture Store Analysis

ue of Capital Budget projects. Simple Payback, Discounted Payback or Weighted Average Capitol Cost (WACC), Net Present Value (NPV), Internal Rate Of Return (IRR), Profitability Index (PI), and Modifie ... (MIRR) are all different methods to evaluate capital budgeting projects. The simple payback period, WACC technique, and NPV are discussed for Guillermo's alternatives.Multiple valuation techniques tha ...

(7 pages) 430 0 0.0 Mar/2010

#### Guillermo Furniture Store Analysis

to define alternative analysis (AoA). Given this information, topics of discussion are the optimal WACC and the use of multiple valuation techniques in reducing risks, as well as calculating the NPV ... ore, the alternative chosen is the maturity matching.Sensitivity AnalysisIn the Guillermo case, the WACC is determined as the average required return for equity and the required return on the debt acc ...

(6 pages) 239 0 0.0 Jun/2010

Subjects: Businesss Research Papers > Management

#### “Glaxo Italia S.p.A.: The Zinnat Marketing Decision”

ulating the FCF's, we calculated the necessary numbers to find theweighted average cost of capital (WACC) (shown in Tables 1 and 3 for direct sales and comarketingrespectively) so we could discount ou ... uk)-1]. Plugging in those numbers, we got a cost of debt of 7.14%, whichwas later used to find the WACC. The final numbers to be input into this WACC equationwere a given marginal tax rate of Italy o ...

(5 pages) 7 0 0.0 Nov/2011

Subjects: Businesss Research Papers > Case Studies