Find a large publicly traded company with market capitalization > $5 billion (USD or CAD). The company can be located anywhere in the world, as long as their reports are available in English.

Make sure that the company has all the 3 types of sources of capital that we discussed common stock (obviously, because it is publicly traded), preferred stock and bonds.

Make sure that the company has a dividend payment history of at least 6+ years, so that you can calculate the dividend growth rate with some confidence.

Please email me and let me know once you have chosen the company.

Please answer the following questions in your report:

Give a brief description of the company and its business and its overall capital structure.

Calculate its cost of common stock using both the methods DGM and SML. Comment on why they are different. They WILL be different. They can be very different and that is okay! Which one would you trust more in your calculation for the WACC and why?

Calculate its cost of preferred stock.

Calculate its cost of debt.

Calculate its Weighted Average Cost of Capital.

Show detailed calculations in the report.

Use all data as of the same date: say, December 31, 2020 or June 30, 2021. Your calculations will be incorrect if you use different data from different dates.

The report will be due on December 18. If there is any special reason for you to ask for an extension, you can do so.

Make sure that it is a professional report. Attach relevant references and documents. All reports must be submitted by email.

Do not attach large documents like the companys annual reports. Simply provide the link of any document and the page number(s) and specify what data have you obtained from there. If it is just a couple of pages of the document, you can attach it and specify what the document is and what data have you used from there. Use all attachments as appendices. Attach a list of appendices before the appendices section.

Companies do not issue just one bond, like you see in your problems discussed in the class. They have MANY bonds. You must calculate the cost of debt for all of these as an aggregate.

Sometimes companies may have more than one series of common stock. Once again keep that in mind when calculating the cost of common stock. The same goes for preferred stocks issued by the company.

As announced earlier in the course, this is worth 10 percent of the course. Both the case studies have been combined.

Please form your groups soon or email me if you want me to allocate you to one. If you foresee any issues related to a smooth functioning of your group project work, please discuss with me sooner rather than later.

If you communicate with me regarding the group project, please cc all your group members, unless there is something private to discuss. Make sure that you get your group members correct email addresses.

Please do not just borrow the calculations from any website. You must source your own data and calculate your own WACC. If you just show me the WACC from some website, you will not get any credit for the project.

If you do not wish to participate, please feel free to say so right in the beginning. Do not join a group and then ruin the working of the group by not responding to their messages and not participating wholeheartedly. It is your choice whether you wish to do the project, or you wish to forgo the credit for it. There is no pressure that you must do it. It is better to make ones intentions clear right in the beginning than cause confusions and problems in the group. I will not hold it against you if you decide to not do the project and forgo the 10 percent.

If you have any special situation related to (your participating in) this project, please do not hesitate to discuss with me.

Please feel free to advise me if I should add any other details to this description.

PLEASE SHOW ALL WORKING AND REFERENCES