\n<\/p>\n

<\/p>\n

Purpose of Assignment<\/strong> <\/strong><\/p>\n

Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company’s weighted average cost of capital and use the analysis to make company investment decisions. <\/strong><\/p>\n

Scenario: <\/strong>Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year’s dividend is $2.50 per share that is growing by 4% per year.<\/p>\n

Prepare <\/strong>a minimum 700-word analysis including the following:<\/p>\n

\n
• Calculate the company’s weighted average cost of capital. Use the dividend discount model. Show calculations in Microsoft^{\u00ae<\/sup> Word.<\/li>\n}
• The company’s CEO has stated if the company increases the amount of long term debt so the capital structure will be 60% debt and 40% equity, this will lower its WACC. Explain and defend why you agree or disagree. Report how would you advise the CEO. <\/li>\n<\/ul>\n

  Format<\/strong> your paper consistent with APA guidelines and provide references. Grading guide attached for reference. <\/p>\n

  
  <\/strong><\/p>\n

  
  <\/span><\/p>\n

  <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

  Purpose of Assignment Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company’s weighted average cost of capital and use the analysis to make company investment decisions. Scenario: Wilson Corporation (not real) has a targeted capital structure of 40% long term debt […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_joinchat":[]},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/263038"}],"collection":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/comments?post=263038"}],"version-history":[{"count":0,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/263038\/revisions"}],"wp:attachment":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/media?parent=263038"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/categories?post=263038"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/tags?post=263038"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}