Bonds Microsoft’s long-term debt is composed of eight long-term bonds. It also has two short-term bonds that mature this year and early next year. These bonds were neglected in this report. In this report the required return was calculated by using the coupon rates‚ market values‚ time until maturity‚ and tax rate. These values were all found on Microsoft’s 2012 financial statement. The weighted average cost of debt was then found through the multiplication of each bond’s required return and their
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Calculate WACC using book values: The weight of debt is calculated by adding the current portion of long-term debt‚ notes payable and long-term debt‚ and dividing it by the sum of debt and equity. $5.4 + 855.3 + 435.9 = $1‚296.6 $1‚296.6 / (1‚296.6 + 3‚494.5) = .27 = 27% The weight of equity is calculated by dividing the total shareholder equity by the sum of debt and equity. $3‚494.5 / (1‚296.6 + 3‚494.5) = .73 = 73% Cost of Debt To find the cost of debt I subtracted the tax savings from
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its cash flow therefore it is a way to; a) Evaluate the Investment Decision b) Decide on a debt policy c) Appraise the performance of top managers 2) Compute the corporate WACC. Be sure to state all your assumptions to get the various inputs to the WACC. r_e=r_f+ β(EMRP) WACC= r_e (E/V)+ r_d (D/V)(1-t) E=Midland’s Equity Market Value D=Midland’s Net Debt (E/V)= Weight for the cost of equity (D/V)= Weight for the cost of V (E+D)= Midland’s total Market Value
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PROBLEM BASED ON CHAPTER 15 – WACC AND THE HAMADA FORMULA Bickley Engineering Company has a capital structure of 30% Debt and 70% Equity. Its current Beta is 1.3‚ and its Market Risk Premium is 7.5% Points. The current Risk Free Rate is 3.5%. Bickley’s marginal tax rate is 40%. What is the Unlevered Beta of Bickley? Bickley’s management would like to change its capital structure to 15% Debt and 85% equity by retiring its bonds yielding 8%. The remaining long term debt will be at 7%. The
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TIMKEN CASE STUDY1Doan Thi Thu Ha Timken was known as a leading manufacturer of highly engineered bearings and alloy steels and famous for its tapered roller bearings with over 200 types in more than 30‚000 sizes. It was also the market leader in mechanical seamless steel tubing and shipped more than one million tons of premium alloy steels annually. Timken was located in Canton‚ Ohio. However‚ its operation was not limited in Ohio but in twenty-five countries and employed over 20‚000 people
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Jessica Carrasco August 9‚ 2010 Art 100 – 40676 The Timken Museum‚ Balboa Park The Timken Museum is located in Balboa Park. The museum is permanently displaying Putnam Foundation Collection. This specific collection contains art work spanning from old American art to Russian Icons from the Moscow and Novgorad schools. I found that of the Italian pieces‚ the first that I enjoyed is Luca Carlevarij’s oil painting of The Piazzetta at Venice displays great depth and the dimensions. Because of
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Within the Timken Museum of Art there is a painting‚ a painting that represents the dilemma within the life of a saint. Giovanni Girolamo Savoldo calls this painting The Torment of Saint Anthony. Savoldo’s painting is framed along a wall of light and dark red arrows with artificial and natural light from above. Within this airy space deemed The Walter Fitch III Room this painting is surrounded by various art pieces from around the world; most of which are religious art pieces. Though each of these
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How would it feel to be pregnant? I will never have the chance to find out‚ thank God‚ but apparently about 13% of the female students at Timken High School in Canton‚ Ohio know how carrying a baby feels. The spread of this epidemic must be halted now before many other aspiring students have their dreams dashed by the responsibility of parenthood. Through stronger parental guidance and support‚ better abstinence programs‚ and more government action‚ this urgent problem must be quelled and brought
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The facts cited herein are generally verifiable in the Encyclopaedia Britannica‚ which was printed primarily on paper produced with cannabis hemp for over 150 years. However‚ any encyclopedia (no matter how old) or good dictionary will do for general verification purposes. From more than 1‚000 years before the time of Christ until 1883 A.D.‚ cannabis hemp‚ indeed‚ marijuana was our planetís largest agricultural crop and most important industry‚ involving thousands of products and enterprises;
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Visual Analysis of a Museum Object On May 7‚ 2011‚ I went to the Timken Museum of art located at the southeast side of Balboa Park‚ San Diego. I chose a painting named “The Piazzetta at Venice” by artist Luca Carlevarijs (1663-1730 Venice). I t was very interesting painting that grabbed my attention at first. The size of painting was 38 x 76-7/8 inches‚ and painted with oil on canvas. The painting took half of the wall and the middle of the painting pointed directly to the viewer’s view
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