Capital planning | Business & Finance homework help

I will send the excel spread sheet.. References have to have a web address. 

Don't use plagiarized sources. Get Your Custom Essay on
Capital planning | Business & Finance homework help
Just from $13/Page
Order Essay

 

 

Review the WACC calculations in the attached Excel file. In your own words, do the following:

  • Explain the steps for deriving the WACC.
  • Discuss the challenges involved in deriving the WACC.
  • Rank and discuss other capital project evaluation techniques, and explain the reasoning behind your ranking

 

Cost of Capital – WACC
               
Market Interest Rate            
a) What is the market interest rate on UPC’s debt and its component cost of debt?  
               
Coupon rate 6%          
Coupons per year 1          
Years to Maturity 15          
Price   $10,153.72          
Face value   $10,000          
Tax rate   30%          
               
N 15            
PV $10,153.72            
PMT $600            
FV $10,000            
               
B-T rd 5.8% Market Interest Rate        
A-T rd 4.1% Cost of Debt        
               
Cost of Preferred Stock            
b) What is UPC’s cost of preferred stock?        
               
Nominal dividend rate 8%          
Dividends per year 4          
Par value   $100          
Price   $111.10          
               
rp 7.20% Cost of Preferred Stock        
               
Cost of Common Stock            
c) What is UPC’s estimated cost of common equity using the CAPM approach?  
               
β   1.2 Beta        
rRF   7% Risk Free Rate      
RPM   6% Market Risk Premium      
               
rS        14.20% Cost of Common Stock        
               
Discounted Cash Flow Approach (DCF)        
d) What is the estimated cost of common equity using the DCF approach?  
               
Price   $100          
Current dividend $10.00          
Constant growth rate 5%          
               
D1   $10.45 Dividend after Year 1        
rs  14.95% Cost of Common Stock        
               
Cost of Common Stock          
e) What is the bond-yield-plus-risk-premium estimate for UPC’s cost of common equity?
               
“Bond yield + RP” premium Given RP = 3%      
               
ks         = 8.84%            
               
PART G              
f) What is your final estimate for rs?          
               
  METHOD ESTIMATE          
  CAPM 14.20%          
  DCF 14.95%          
  rd + RP 8.84%          
  Average 12.66%          
               
               
WACC              
g) What is UPC’s overall, or weighted average cost of capital (WACC)?    
  Structure            
wd 30% A-T rd 4.09%        
wp 10% rp 7.20%   WACC = 9.55%  
ws 60% rs 12.66%        

Place Order
Grab 16% Discount On This Paper
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

We value our clients. For this reason, we ensure that each paper is written carefully as per the instructions provided by the client. Our editing team also checks all the papers to ensure that they have been completed as per the expectations.

Professional Academic Writers

Over the years, MyEssay.Help has managed to secure the most qualified, reliable and experienced team of writers. The company has also ensured continued training and development of the team members to ensure that it keep up with the rising Academic Trends.

Affordable Prices

Our prices are fairly priced in such a way that ensures affordability. Additionally, you can get a free price quotation by clicking on the "Place Order" button.

On-Time delivery

We pay strict attention on deadlines. For this reason, we ensure that all papers are submitted earlier, even before the deadline indicated by the customer. For this reason, the client can go through the work and review everything.

100% Originality

At MyEssay.help, all papers are plagiarism-free as they are written from scratch. We have taken strict measures to ensure that there is no similarity on all papers and that citations are included as per the standards set.

Customer Support 24/7

Our support team is readily available to provide any guidance/help on our platform at any time of the day/night. Feel free to contact us via the Chat window or support email: support@myessay.help.

Try it now!

Grab 16% Discount On This Paper

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

MyEssay.help has stood as the world’s leading custom essay writing services providers. Once you enter all the details in the order form under the place order button, the rest is up to us.

Essays

Essay Writing Services

At MyEssay.help, we prioritize on all aspects that bring about a good grade such as impeccable grammar, proper structure, zero-plagiarism and conformance to guidelines. Our experienced team of writers will help you completed your essays and other assignments.

Admissions

Admission and Business Papers

Be assured that you’ll definitely get accepted to the Master’s level program at any university once you enter all the details in the order form. We won’t leave you here; we will also help you secure a good position in your aspired workplace by creating an outstanding resume or portfolio once you place an order.

Editing

Editing and Proofreading

Our skilled editing and writing team will help you restructure you paper, paraphrase, correct grammar and replace plagiarized sections on your paper just on time. The service is geared toward eliminating any mistakes and rather enhancing better quality.

Coursework

Technical papers

We have writers in almost all fields including the most technical fields. You don’t have to worry about the complexity of your paper. Simply enter as much details as possible in the place order section.

                                                                                     Place Order macbook tamir - mersin escort - casino-masino.com - bahis