ASSIGNMENT #1 DEVELOP A WEIGHTED COST OF CAPITAL AND BUDGET FOR A COMPANY ...
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ASSIGNMENT # DEVELOP A WEIGHTED COST OF CAPITAL AND BUDGET FOR A COMPANY Title: Capital Budget Management Overview: In this project, you will develop a cost of capital for a hypothetical company. You will be required to prepare a budget for a project being considered as part of capital budgeting. A written report will be submitted by all students that explains how you arrived at your cost of capital and budget. Instructions: Part : Developing a Cost of Capital You will create your own hypothetical company. Estimate the cost of equity for the company. Explain how you arrived at your estimate Estimate the company cost of debt. Explain how you arrived at your estimate. Calculate the weighted average cost of capital WACC: Using the cost of equity and cost of debt, calculate the WACC for the company. Explain how you arrived at your estimate of the weights for equity and debt. Discuss any limitations or assumptions made in calculating the WACC: Explain any limitations or assumptions made in your calculations and how they may impact the accuracy of your cost of capital. Part : Analyzing Hypothetical Project Analyze the project budget and describe how the project will help the company.
ASSIGNMENT #
DEVELOP A WEIGHTED COST OF CAPITAL AND BUDGET
FOR A COMPANY
Title: Capital Budget Management
Overview: In this project, you will develop a cost of capital for a hypothetical company. You will be required to prepare a budget for a project being considered as part of capital budgeting. A written report will be submitted by all students that explains how you arrived at your cost of capital and budget.
Instructions:
Part : Developing a Cost of Capital
You will create your own hypothetical company.
Estimate the cost of equity for the company. Explain how you arrived at your estimate
Estimate the company cost of debt. Explain how you arrived at your estimate.
Calculate the weighted average cost of capital WACC: Using the cost of equity and cost of debt, calculate the WACC for the company. Explain how you arrived at your estimate of the weights for equity and debt.
Discuss any limitations or assumptions made in calculating the WACC: Explain any limitations or assumptions made in your calculations and how they may impact the accuracy of your cost of capital.
Part : Analyzing Hypothetical Project
Analyze the project budget and describe how the project will help the company.
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