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Midland Energy Resources, Inc Assignment Questions: How are Mortensen's estimates of Midland's cost of capital used? How, if at all, should these anticipated uses affect
Midland Energy Resources, Inc"
Assignment Questions:
- How are Mortensen's estimates of Midland's cost of capital used? How, if at all, should these anticipated uses affect the calculations?
- Calculate Midland's corporate WACC. Be prepared to defend your specific assumptions about the various inputs to the calculations. Is Midlands choice of EMRP appropriate? If not, what recommendations would you make and why?
- Should Midland's use a single corporate hurdle rate for evaluating investment opportunities in all of its divisions? Why or why not?
- Compute a separate cost of capital for the E&P and Marketing and Refining divisions? What causes them to differ from one another?
- How would you compute a cost of capital for the Petrochemical division?
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Government and Not for Profit Accounting Concepts and Practices
Authors: Michael H. Granof, Saleha B. Khumawala
6th edition
978-1-119-4958, 9781118473047, 1118155971, 1118473043, 978-1118155974
