# Fin515 second course project graded – 43/50 – 2016

Second Project

Don't use plagiarized sources. Get Your Custom Essay on
Fin515 second course project graded – 43/50 – 2016
Just from \$13/Page

The purpose of this project is for you to have some practice working with financial concepts in the real world. This will involve integrating some material from throughout the course. The project will also involve the development of your own approach to doing the work. The project does not provide a step-by-step procedure for you to follow.

Your task is to determine the WACC for a given firm using what you know about WACC as well as data you can find through research. Your deliverable is to be a brief report in which you state your determination of WACC, describe and justify how you determined the number, and provide relevant information as to the sources of your data.

Assumptions

As you recall, the formula for WACC is

rWACC = (E/E+D) rE + D/(E+D) rD(1-TC)

The formula for the required return on a given equity investment is

ri= rf + βi * (RMkt-rf)

RMkt-rfis the Market Risk Premium. For this project, you may assume that the Market Risk Premium is 4%, unless you can develop a better number.

rfis the risk-free rate. The YTM on 10-year U.S. Treasury securities is a good approximation.

You may assume a corporate tax rate of 40%.

One good source for financial data for companies as well as data about their equity is http://finance.yahoo.com. By looking around this site, you should be able to find the market capitalization (E) as well as the β for any publicly traded company.

There are not many places left where data about corporate bonds is still available. One of them is http://finra-markets.morningstar.com/BondCenter. To find data for a particular company’s bonds, find the Quick Search feature. Then, be sure to specify corporate bonds and type in the name of the issuing company. This should give you a list of all of the company’s outstanding bond issues. Clicking on the symbol for a given bond issue will lead you to the current amount outstanding and the yield to maturity. You are interested in both. The total of all bonds outstanding is D in the above formula.

If you like, you can use the YTM on a bond issue that is not callable as the pre-tax cost of debt for the company.

Deliverable

Write a two or three page report that contains the following elements:

2.       How data were used to calculate WACC. This would be the formula and the formula with your values substituted.

4.       A discussion of how much confidence you have in your answer. What were the limiting assumptions that you made, if any?

 Rubric – Second Project Possible Points Criteria and Point Range Data 15 0–3 4–7 8–11 12–15 Little or no data provided. Source of data not clear. Unclear relationship between data and variables. Data mostly corresponds to variables. Relationships between data and variables clear and correct. Calculations 15 0–3 4–7 8–11 12–15 Calculations not provided or are generally incorrect. Not all calculations provided or some calculations are incorrect. Calculations are nearly but not totally provided or correct. Calculations are provided and are correct. Evaluation 10 0–2 3–4 5–7 8–10 Evaluation of answer or limitations and assumptions not discussed. Either evaluation of answer or discussion of limitations and assumptions missing or minimal. Evaluation of answer and discussion of limitations and assumptions provided. Missing some limitations or assumptions. Complete and thorough discussion of confidence in answer based on limitations and discussions. Form 10 0–2 3–4 5–7 8–10 Significant problems with writing or format. Minor problems with writing or format. Writing and format generally correct with a few exceptions. Virtually no errors in writing or format. 50

Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

### Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

### Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors: