Answer Happy

1) An introductory paragraph briefly talking about your company
and why you chose it.
2) Estimation of the risk-free rate (provide the value, source,
date, as well as short
explanation behind your choice of risk-free rate)
3) Estimation of the equity market risk premium (provide the
calculation of your risk
premium)
4) Estimation of beta (use the monthly stock prices of the last 5
years to estimate the beta,
present the estimation in a graph, and interpretation of what the
beta of your company
implies)
5) Computation of your estimated cost of common equity using CAPM.
For comparison of
your estimated cost of common equity, compute the cost of common
equity using the
dividend discount model as well, in this case show the estimation
of the upcoming
dividend and growth in dividends (provide the value, source, for
all your computations).
6) Estimation of cost of debt? (provide the value as well as a
short explanation behind
choice of your value)
7) Estimation of the WACC (describing in detail how you got the
target capital structure
weights, including the sources and dates of when the information
was gathered).3
8) Explain what the WAC means, how can you use it in decisions, and
do you think that
you got a reasonable estimate.
9) Explain why a MNC company might need to use a different cost of
capital to evaluate the
projects of its foreign subsidiaries rather than using the domestic
parent's cost of capital.
Take your time
Answer all questions plz.