What’s your real cost of capital? By James J. McNulty‚ Tony D. Yeh‚ William s. Schulze‚ and Michael H. Lubatkin Harvard Business Review‚ October 2002 Issue of the article: valuing investment projects Number of pages: 12 Daniel Miravet Campos Part 1. Executive summary This article is fundamentally based on the exposition of a new method to calculate the cost of capital for a company (MCPM)‚ to meet the inefficiencies of the current one (CAPM). In valuing any investment project or
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the Wall Street Journal was not only business; it was personal. He knew that with the WSJ under his control‚ he could accomplish his dream of destroying the New York Times. (Sherman‚ 2010) The book «War at the Wall Street Journal» tells a story about big business‚ an imploding family and a deal that adds up together an epoch of change. «War at the Wall Street Journal» is a book written by Sarah Ellison‚ an American writer‚ and journalist. She spent 10 years working as a reporter at the Wall Street
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Occupy Wall Street Professor Craig Business Ethics May 5‚ 2013 “Occupy Wall Street is a leaderless resistance movement with people of many colors‚ genders and political persuasions. The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%. We are using the revolutionary Arab Spring tactic to achieve our ends and encourage the use of nonviolence to maximize the safety of
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Chapter 8 The Cost of Capital 236 CHAPTER 8—THE COST OF CAPITAL TRUE/FALSE 1. Capital refers to items on the right-hand side of a firm’s balance sheet. 2. The component costs of capital are market-determined variables in as much as they are based on investors’ required returns. 3. The cost of debt is equal to one minus the marginal tax rate multiplied by the coupon rate on outstanding debt. 4. The cost of issuing preferred stock by a corporation must be adjusted to an after-tax
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product lines‚ new equipment and other assets‚ managers must know the cost of obtaining funds to acquire these assets. The cost associated with different sources of funds is called the cost of capital. . If the business earns more than its cost of capital‚ the market value of the business will increase. Likewise‚ if returns on long-term investments are below the cost of capital‚ market values will decline. Therefore‚ how we manage capital is extremely important to fulfilling the basic objective of increased
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Questions Case #5 – Marriott Corporation: The Cost of Capital 1. Are the four components of Marriott’s financial strategy consistent with its growth objective? 2. How does Marriott use its estimate of its cost of capital? Does this make sense? 3. What is the weighted average cost of capital for Marriott Corporation? a. What risk free rate and risk premium did you use to calculate the cost of equity? b. How did you measure Marriott’s cost of debt? 4. If Marriott used a single corporate
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The Cost of Capital for Goff Computer‚ Inc. Rahul Parikh BUS650: Managerial Finance (MAH1209A) Dr Charles Smith March 18‚ 2012. The Cost of Capital for Goff Computer‚ Inc.: 1. Most publicly traded corporations are required to submit 10Q (quarterly) and 10K (annual) reports to the SEC detailing their financial operations over the previous quarter or year‚ respectively. These corporate fillings are available on the SEC Web site at www.sec.gov. Go to the SEC Web site‚ follow the “Search for
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Capital Ideas: The Improbable Origins of Modern Wall Street In his book‚ Capital Ideas: The Improbable Origins of Modern Wall Street‚ Peter L. Bernstein examines the innovative financial work of various academics that helped shape modern Wall Street. Bernstein sets out to show that Wall Street is in fact a fundamental and useful model to follow‚ rather than something to be feared. He points out that‚ “By combining the linkage between risk and reward with the combative nature of the free market
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McGraw-Hill Wall Street Survivor Stock Portfolio Project (Note to Instructors) Introduction Your McGraw-Hill textbook gives your students the opportunity to participate in the McGraw-Hill/Stock-Trak Wall Street Survivor simulation for FREE. The simulation can be accessed by first creating an account at: http://www.wallstreetsurvivor.com/Public/Members/McGraw.aspx?p=MGH_InvestmentTrader_Business. A screenshot of the registration page is shown below. The signup process is straightforward and the
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Companies‚ 2007 CHAPTER CHAPTER OUTLINE 9 Management of Economic Exposure How to Measure Economic Exposure Operating Exposure: Definition Illustration of Operating Exposure Determinants of Operating Exposure Managing Operating Exposure Selecting Low-Cost Production Sites Flexible Sourcing Policy Diversification of the Market R&D Efforts and Product Differentiation Financial Hedging CASE APPLICATION: Exchange Risk Management at Merck Summary Key Words Questions Problems Internet Exercises MINI CASE:
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