WACC and Corporate Investment Decisions

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Purpose of Assignment 

Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company's weighted average cost of capital and use the analysis to make company investment decisions. 

About Your Signature Assignment

This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments may be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements.

Assignment Steps 

Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft®Office website. There are also additional tutorials via the web that offer support for office products. 

Scenario: Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year's dividend is $2.50 per share that is growing by 4% per year.

Prepare a minimum 700-word analysis including the following:

  • Calculate the company's weighted average cost of capital. Use the dividend discount model.  Show calculations in Microsoft® Word.
  • The company's CEO has stated if the company increases the amount of long term debt so the capital structure will be 60% debt and 40% equity, this will lower its WACC. Explain and defend why you agree or disagree. Report how would you advise the CEO. 

Format your paper consistent with APA guidelines.

    • Posted: 9 months ago
    • Due: 
    • Budget: $20
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    • All work must be done in Microsoft EXCEL!!!!!!! And Microsoft WORD. Please have by 8:00am west coast time California time. Plagrism free, original work, and refs. APA format. All excel formulas must …

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      Fin w4

      Purpose of Assignment

      Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company's weighted average cost of …

    • Rated 1 times

      Finance WACC


      Scenario: Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is …

    • Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft®Officewebsite. There are also additional tutorials via the web that offer support for office products.

    • Purpose of Assignment


      Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company's weighted average cost …

    • About Your Signature Assignment

      This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad …

    • Rated 1 times

      FIN370

      This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students …

    • Purpose of Assignment

      Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company's weighted average cost of …

    • Purpose of Assignment

      Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company's weighted average cost of …

    • Purpose of Assignment

      Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company's weighted average cost …