以下是引用wzaina在2009-3-5 10:06:00的发言：
LOS h: Explain and calculate the weighted average cost of capital for a company.
Q1. Jaime Moreno, a new hire at the venture-capital fund Burkhart Partners, has been tasked with assessing the appeal of various potential equity investments. Moreno has been given the weighted average cost of capital (WACC) for each company. To determine the value of each company’s equity, Moreno should:
A) strip the effects of debt out of the WACC, then calculate the value of equity.
B) calculate the firm value using the WACC, then strip out the value of debt.
C) calculate the equity value using the WACC, then incorporate the value of debt.
Q2. For an analyst seeking to value an entire company, the best tool is the:
A) capital asset pricing model.
B) weighted average cost of capital.
C) Pastor-Stambaugh model.
Q3. Marina Syltus, chief financial officer of Worcester Water Treatment, wants to know the cost of the company’s capital so it can make wiser budgeting decisions. Syltus has assembled the following data:
- Worcester’s long-term debt has a market value of $230 million.
- Worcester’s shares have a total market value of $782 million.
- The marginal tax rate is 37%.
- The required return on equity is 14.6%.
- Worcester’s long-term debt has a weighted average interest rate of 9.4%.
To calculate the weighted average cost of capital, Syltus needs:
A) the required return on debt.
B) the target debt/equity ratio.
C) both the required return on debt and the target debt/equity ratio.
发表于 2009-5-24 10:02
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