Janet Mortensen‚ senior vice president of project finance at Midland Energy Resources‚ is in the process of preparing her annual cost of capital estimates for Midland and each of its three divisions (oil and gas exploration and production (E&P)‚ refining and marketing (R&M)‚ and petrochemicals). These estimates are used in many analyses within Midland‚ including capital budgeting decisions‚ financial accounting‚ performance appraisals‚ M&A proposals‚ and stock repurchase decisions. There has been
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Midland Energy Resources 1. For what purposes does Mortensen estimate Midland’s cost of capital? What would be the potential consequences of a too high estimate compared to the firm’s “true” cost of capital? What about a too low estimate? Estimates of the cost of capital were used in many analyses within Midland‚ including asset appraisals for both capital budgeting and financial accounting‚ performance assessments‚ M&A proposals‚ and stock repurchase decisions. Moreover‚ depending
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Answer Case Study 2 Midland Energy Resources (as a whole company) According to the article‚ the beta of Midland Energy is 1.25. beta=1.25 cost of equity re = rf + beta * (EMRPs) EMRPs = 5.0% We assume that the company will run for next 30years‚ so the rate of risk free is 4.98% rf = 4.98% Cost of Equity: rE = rf + beta * (EMRPs) = 4.98% + 1.25 * 5% = 11.23% Market Value of Equity = $134114m (Exhibit 5) Cost of Debt 30years‚ rD = rf + spread to treasury = 4.98% + 1.62% = 6.60% Market
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SCI 230 Week 1 Checkpoint Theories of Biology.doc The Major Theories of Biology Evolution by natural selection: This theory came about as a result of Charles Darwin trying to find an explanation for “why there are so many different living beings on earth?” (Pruitt‚ N. L.‚ & Underwood‚ L. S. (2006). His theory contains two parts‚ the first part states that species change over generations. The second part states that what causes this change is natural
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Midland Energy Resources Midland Energy Resources is a fully integrated energy company with operations in E&P‚ Refining & Marketing (R&M) and Petrochemicals. Capital budgeting at Midland is done using discounted cash flow method and weighted average cost of capital (rwacc). Corporate Weighted Average Cost of Capital‚ rwacc The primary use of the corporate rwacc is valuation (TV=FCF/(rwacc-g)). While the rwacc may be used for evaluating internal projects‚ the usage will be incorrect owing to the
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does Midland determine that shares are undervalues? Midland Energy Resources determine that the shares are undervalued with a comparing from the intrinsic value of the shares and the actual stock price. The intrinsic value can be computed with the fundamental value of the enterprise minus the market value of debts divided per the number of shares outstanding. For calculate the fundamental value of the enterprise‚ Midland Energy Resources has to sum up all discounted future net cash flows of the firm
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SCI/230 Food Web Diagram Food Web Diagram: The Everglades By: Ashley Earp Due: Sunday May 12 Class: SCI/230 Instructor: Ethel Garcia SCI/230 Food Web Diagram Food Web Diagram of the Everglades. |-------------------------------- Alligators/Anaconda/Pythons(C)--------------------------------| /
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Individual Understand Your Fats and Fiber | Access the American Heart Association web site located on your student page. Read the “Face the Fats: Fats 101” and “Face the Fats: Meet the Fats” sections. Access the Nutrition.gov web site located on your student page.Read the “MedlinePlus: Dietary Fiber” section. Write a 350- to 700-word response in APA format answering the following questions: According to the “Face the Fats” sections‚ what are bad fats‚ better fats‚ and best fats? Define saturated
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Yellow Stone National Park Alejandro Otero SCI/256- People‚ Science and the Environment Ms. Nathalie Basma July 30‚ 2013 Yellow Stone National Park “The human history of the Yellowstone region goes back more than 11‚000 years. From then until to the very recent past‚ many groups of Native Americans used the park as their homes‚ hunting grounds‚ and transportation routes. These traditional uses of Yellowstone lands continued until a little over 200 years ago when the first people of European
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Course Name: SCI/256 WEEK ONE: Question #1: Provide a brief summary of the history of the environmental movement? Answer #1: The environmental movement started around the end of the 1700’s. However‚ most people did not join in to or even know about the environmental movement until many decades later. You could say that there was at first a sharp increase in the awareness of the environmental problems and the environmental movement to stop these problems around the mid 1950’s. This is
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