Cost of Capital questions and practice problems Questions 1. What does the WACC measure? 2. Which is easier to calculate directly‚ the expected rate of return on the assets of a firm or the expected rate of return on the firm’s debt and equity? Assume you are an outsider to the firm. 3. Why are market-based weights important? 4. Why is the coupon rate of existing debt irrelevant for finding the cost of debt capital? 5. Under what assumptions can the WACC be
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affects folding speed. We estimated folding times for the present-day catalog of protein domains directly from their size-modified contact order. These values were mapped onto an evolutionary timeline of domain appearance derived from a phylogenomic analysis of protein domains in 989 fully-sequenced genomes. Our results show a clear overall increase of folding speed during evolution‚ with known ultra-fast downhill folders appearing rather late in the timeline. Remarkably‚ folding optimization depends
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Ever since contracts began in professional sports the price of athletes has continued to rise. So why are athletes worth so much? And where does all the money come from? It is all about the revenue‚ a team’srevenue determines how much they can pay their players.Athletes deserve their pay because they aresome of the hardest working people and are the cornerstone of a business that makes billions of dollars.` ` Athletes are some of the highest people not only in the United States but possibly in
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Are Professional Athletes paid too much? Healthcare workers save lives on a daily basis for sixty thousand dollars a year‚ while professional athletes receive millions of dollars merely to entertain. Athletes should be paid well because they must train harder physically than other people‚ they must work even when they are not working‚ and their chosen profession sometimes entails great physical risks. Society believes that once a person is athletic they automatically qualify to become
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of Capital A company’s capital is consists of mostly debt or equity. Equity and debt are external sources of financing and financing from external sources is not without cost. The cost of capital is the cost to raise capital through equity and debt. It can be defined as the weighted sum of the cots of equity and the cost of debt. It determines the rate of return that a firm would receive if it invested its money in another option with a similar risk. A risky business will have a higher cost
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INTRODUCTION: This session long project looks at the calculations used to determine the weighted average cost of capital (WACC). This SLP calculates the WACC for my SLP company – McDonalds‚ discusses how those calculations were arrived at and briefly describes WACC and what investors use it for. COMPANY NAME: McDonalds Inc Balance sheet date: 31 DEC 07 Market values date: 1 SEP 08 SOURCE
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Paid in Capital vs. Earned Capital Earned capital and paid in capital are two important items for investors. Earned capital comes from any profits the operation gathers. Paid in capital is the amount of investment a shareholder has contributed to the business for use (Business Finance‚ 2008). The following paragraphs will contribute a more detailed definition of what these two components are used for and why they are important. This essay will also touch on diluted earnings per share and basic
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WACC: Weighted average cost of capital =WACC= SS+B×Rs+BS+B×RB×1-tC note: Rs ‚ cost of equity; RB ‚ cost of debt; tC ‚ corporate tax rate. For cost of equity‚ Rs‚ we calculate it by using the SML‚ according to CAPM model. Rs=RF+β×[RM-RF] As we can see in the chart behind the case‚ beta of Worldwide Paper Company is 1.10; the Market risk premium (RM-RF) is 6.0%. Because this on-site longwood woodyard project has six year life and the investment spend over two years‚ the total long of this program
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Weighted Average Cost of Capital What It Measures The weighted average cost of capital (WACC) is the rate of return that the providers of a company’s capital require‚ weighted according to the proportion each element bears to the total pool of capital. Why It Is Important WACC is one of the most important figures in assessing a company’s financial health‚ both for internal use (in capital budgeting) and external use (valuing companies on investment markets). It gives companies an insight into
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Guoyi Chen Should Obese People Have Higher Premiums The Obesity epidemic affects millions people of the United States every day. According to the National Institutes of Health‚ “obesity” refers to any individual with a BMI of more than 30 and BMI is simply a calculation that assesses weight relative to height (NIH). In the past decades‚ the number of obese Americans has increased dramatically. Based on the data from Nation Health and Examination Survey‚ about one-third of U.S. adults (33.8%)
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