In early 2003‚ Boeing released plans to build a new “super efficient” jet called the 7E7. The jet subsequently gained the nickname the “Dreamliner.” In the six months following the announcement news depressed the market for aircraft‚ which was already shrinking. This news included the United States going to war with Iraq‚ global terrorist attacks‚ and SARS putting travelers in fear. This all contributed to the worst airline profits in a generation. From Boeing’s perspective this meant for a
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Preface First of all‚ I would like to thank Ms. Thuy for her enthusiastic guidance and response all of questions to help me complete this exercise easily. Simultaneously‚ thanks to her professional lectures on class which also build me with deep understanding of how to access and deal with problems in financial management so that I can complete this report. All of the data is collected through 2 website: http://finance.yahoo.com/ and http://www.finra.org/ I. ABOUT FEDEX CORPORATION: FedEx
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Calculating WACC for Marriot Marriot has three divisions : * Lodging * Restaurant * Contract services Financial Strategy of Marriott * Manage rather than own hotel assets * Invest in projects that increase shareholder value * Optimize the use of debt in the capital structure * Repurchase undervalued sharesunlevered Unlevered Asset Beta Asset beta = (E/V) * Equity betaE = Market value of equity V = Market value of company = Market value of equity
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Sam O’Brien‚ C10390017‚ DT366 yr2 Report on the WACC for Fiat motors The WACC is the weighted average cost of capital. It is a calculation of the firms cost of capital taking into account the relevant weight of equity and debt as a proportion of the total. The cost of equity or KE calculated using a risk free rate example German 5yr government bond‚ the firm’s beta and the return on the market. The firm’s beta is a calculation of the firms exposure to the market‚ a beta of less than 1 indicates
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Marriot Case Marriot use the Weighted Average Cost of Capital to estimate the cost of capital for the corporation as a whole and for each division‚ and the hurdle rate is updated annually.(WACC = (1-Tc) * (D/A) * R[D] + (E/A) * R[E]) Marriot’s Tax Bracket = 175.9/398.9 = 44% Division’s asset weight to the corporation: Lodging = 2777.4/4582.7 = 0.59 Contract = 1237.7/4582.7 = 0.28 Restaurant = 567.6/4582.7 = 0.13 Risk free rate is 30 years T-Bond = 8.95% (Lodging use long-term debt)
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Medulla Oblongata The medulla oblongata is a portion of the hindbrain that controls autonomic functions such as breathing‚ digestion‚ heart and blood vessel function‚ swallowing and sneezing. Heart Man When only 16‚ Heart Man underwent brain surgery to remove a deadly tumor that was located adjacent to the medulla. Doctors accidently cut into the medulla and almost destroyed it. When Heart Man woke up he was able to slow down or increase his heart rate to conserve or use more energy.
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A Note on Valuation Models: CCFs vs. APV vs WACC Fabrice Bienfait Table of Content Introduction..................................................................................................................................... 2 Enterprise Valuation ....................................................................................................................... 2 The Weighted Average Cost of Capital Approach ......................................................................... 2 The
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Financial Management Agenda 1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? 2. If you do not agree with Cohen’s analysis‚ calculate your own WACC for Nike and justify your assumptions. 3. Calculate the costs of equity using CAPM‚ the dividend discount model‚ and the earnings capitalization ratio. What are the advantages and disadvantages of each method? 4. What should Kimi Ford recommend regarding
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0.28 0.48 0.42 Target D/D+S Target D/S Levered Beta 74% 2.85 1.62 Costs of Equity: Rf Lodging MRP 8.95% 7.43% Beta Requity 1.62 21.02% Costs of Debt: Rf Lodging 8.95% Spread Tax rate Rdebt(1-T) 1.10% 0.44 0.0563 WACCs: Lodging Target D/D+S Rdebt(1-T) S/D+S Requity WACC 74% 0.0563 26% 21.02% 9.63% Page 1 Sales Weighted Levered Beta 1.56
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Risk – Free Rate 3% + Beta Coefficient .36 Market Risk Premium 8% Cost of Equity 5.88% + Risk - Free Rate 3.% Weighted Cost of Equity 3.52% X Percentage of Total Capital Supplied by Equity 60% + Before Tax Cost of Debt 5.66% WACC 5..00% Weighted Cost of Debt 1.53% Before Tax Operating Profit in % 100% After Tax Cost of Debt 3.83% X X After Tax Operating Profit in 67.6% 40% of Total Capital Supplied by Debt 40% - Income Tax Rate 32.4% Rate of Return of
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