Once again, your team is the key financial management team for your company The companys CEO is now looking to expand its operations by investing in new property, plant, and equipment In order to effectively evaluate the projects effectiveness, you have been asked to determine the firms weighted average cost of capital To determine the cost of capital, here is what you have been asked to do Go to Yahoo Finance (http finance yahoo com) and capture the income statement information for the company you selected (Be sure that your company has debt on their balance sheet This will be required in your project ) Enter your companys name or ticker symbol Your companys information should appear Click on the Financials tab, and select the income statement option Three years worth of income statements should appear Copy and paste this data into a spreadsheet Repeat step b above for the balance sheets of the company Click on Historical Prices Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above Calculate the Weighted Average Cost of Capital (WACC) for the company a Cost of Debt Determine the market value of the firms debt issues Be sure to review the firms 10 K Also, the website http finra markets morningstar com BondCenter may be of assistance You will need to calculate the firms composite YTM on its bonds This can be achieved by calculating a weighted average YTM for its bond issues After calculating the YTM for the bond issues, calculate the firms after tax cost of debt If the firms marginal tax rate cannot be identified in its 10 K, assume that the tax rate will be 35 Cost of Equity Calculate the firms cost of equity using the capital asset pricing model (CAPM) The formula for the CAPM is r i r f i (R Mkt r f ) Assume the risk free rate ( r f ) is the current rate of 10 year U S Treasury Bonds Calculate the market rate ( R Mkt ) by calculating the market return on the Standard Poors 500 for the past 2 calendar years The beta for the firm can be obtained from Yahoo Finance Calculate the WACC Determine the market capitalization of the firms common equity and preferred equity, if any Determine the firms capital structure based on the market value of the firms equity and debt The market value of the firms debt can be obtained from the Morningstar website, listed in the Cost of Debt section above iii As you recall, the formula for WACC is r WACC E ( E D ) r E D ( E D ) r D (1 T C ) Deliverable Prepare a narrated PowerPoint presentation using VoiceThread or WebEx that shows the steps you performed to calculate the WACC for your firm Feel free to embed your Excel spreadsheets in the presentation to demonstrate your calculations Be sure to discuss how the values were obtained or derived to arrive at your WACC result Finally, be sure to discuss any strengths or limitations in the calculations you performed, and discuss your analysis about the overall validity of your results Both members of the team must be part of the narration in the presentation Grading Rubric Possible Points Criteria and Point Range Calculation of Cost of Debt 12 0 3 4 6 7 9 10 12 Incorrect data or no debt data provided Incorrect cost of debt calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate debt data collected and correct cost of debt calculations made Calculation of Cost of Equity 12 0 3 4 6 7 9 10 12 Incorrect data or no equity data provided Incorrect cost of equity calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate equity data collected and correct cost of debt calculations made WACC Calculation 8 0 2 3 4 5 6 7 8 All elements of the WACC calculation are incorrect, or calculation not performed Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result Form 8 0 2 3 4 5 6 7 8 Poor writing and presentation skills, or no presentation provided Several problems noted in regard to writing and presentation skills Writing and presentation done well with a few minor errors Virtually no errors in writing or presentation Once again, your team is the key financial management team for your company The companys CEO is now looking to expand its operations by investing in new property, plant, and equipment In order to effectively evaluate the projects effectiveness, you have been asked to determine the firms weighted average cost of capital To determine the cost of capital, here is what you have been asked to do Go to Yahoo Finance (http finance yahoo com) and capture the income statement information for the company you selected (Be sure that your company has debt on their balance sheet This will be required in your project ) Enter your companys name or ticker symbol Your companys information should appear Click on the Financials tab, and select the income statement option Three years worth of income statements should appear Copy and paste this data into a spreadsheet Repeat step b above for the balance sheets of the company Click on Historical Prices Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above Calculate the Weighted Average Cost of Capital (WACC) for the company a Cost of Debt Determine the market value of the firms debt issues Be sure to review the firms 10 K Also, the website http finra markets morningstar com BondCenter may be of assistance You will need to calculate the firms composite YTM on its bonds This can be achieved by calculating a weighted average YTM for its bond issues After calculating the YTM for the bond issues, calculate the firms after tax cost of debt If the firms marginal tax rate cannot be identified in its 10 K, assume that the tax rate will be 35 Cost of Equity Calculate the firms cost of equity using the capital asset pricing model (CAPM) The formula for the CAPM is r i r f i (R Mkt r f ) Assume the risk free rate ( r f ) is the current rate of 10 year U S Treasury Bonds Calculate the market rate ( R Mkt ) by calculating the market return on the Standard Poors 500 for the past 2 calendar years The beta for the firm can be obtained from Yahoo Finance Calculate the WACC Determine the market capitalization of the firms common equity and preferred equity, if any Determine the firms capital structure based on the market value of the firms equity and debt The market value of the firms debt can be obtained from the Morningstar website, listed in the Cost of Debt section above iii As you recall, the formula for WACC is r WACC E ( E D ) r E D ( E D ) r D (1 T C ) Deliverable Prepare a narrated PowerPoint presentation using VoiceThread or WebEx that shows the steps you performed to calculate the WACC for your firm Feel free to embed your Excel spreadsheets in the presentation to demonstrate your calculations Be sure to discuss how the values were obtained or derived to arrive at your WACC result Finally, be sure to discuss any strengths or limitations in the calculations you performed, and discuss your analysis about the overall validity of your results Both members of the team must be part of the narration in the presentation Grading Rubric Possible Points Criteria and Point Range Calculation of Cost of Debt 12 0 3 4 6 7 9 10 12 Incorrect data or no debt data provided Incorrect cost of debt calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate debt data collected and correct cost of debt calculations made Calculation of Cost of Equity 12 0 3 4 6 7 9 10 12 Incorrect data or no equity data provided Incorrect cost of equity calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate equity data collected and correct cost of debt calculations made WACC Calculation 8 0 2 3 4 5 6 7 8 All elements of the WACC calculation are incorrect, or calculation not performed Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result Form 8 0 2 3 4 5 6 7 8 Poor writing and presentation skills, or no presentation provided Several problems noted in regard to writing and presentation skills Writing and presentation done well with a few minor errors Virtually no errors in writing or presentation Once again, your team is the key financial management team for your company The companys CEO is now looking to expand its operations by investing in new property, plant, and equipment In order to effectively evaluate the projects effectiveness, you have been asked to determine the firms weighted average cost of capital To determine the cost of capital, here is what you have been asked to do Go to Yahoo Finance (http finance yahoo com) and capture the income statement information for the company you selected (Be sure that your company has debt on their balance sheet This will be required in your project ) Enter your companys name or ticker symbol Your companys information should appear Click on the Financials tab, and select the income statement option Three years worth of income statements should appear Copy and paste this data into a spreadsheet Repeat step b above for the balance sheets of the company Click on Historical Prices Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above Calculate the Weighted Average Cost of Capital (WACC) for the company a Cost of Debt Determine the market value of the firms debt issues Be sure to review the firms 10 K Also, the website http finra markets morningstar com BondCenter may be of assistance You will need to calculate the firms composite YTM on its bonds This can be achieved by calculating a weighted average YTM for its bond issues After calculating the YTM for the bond issues, calculate the firms after tax cost of debt If the firms marginal tax rate cannot be identified in its 10 K, assume that the tax rate will be 35 Cost of Equity Calculate the firms cost of equity using the capital asset pricing model (CAPM) The formula for the CAPM is r i r f i (R Mkt r f ) Assume the risk free rate ( r f ) is the current rate of 10 year U S Treasury Bonds Calculate the market rate ( R Mkt ) by calculating the market return on the Standard Poors 500 for the past 2 calendar years The beta for the firm can be obtained from Yahoo Finance Calculate the WACC Determine the market capitalization of the firms common equity and preferred equity, if any Determine the firms capital structure based on the market value of the firms equity and debt The market value of the firms debt can be obtained from the Morningstar website, listed in the Cost of Debt section above iii As you recall, the formula for WACC is r WACC E ( E D ) r E D ( E D ) r D (1 T C ) Deliverable Prepare a narrated PowerPoint presentation using VoiceThread or WebEx that shows the steps you performed to calculate the WACC for your firm Feel free to embed your Excel spreadsheets in the presentation to demonstrate your calculations Be sure to discuss how the values were obtained or derived to arrive at your WACC result Finally, be sure to discuss any strengths or limitations in the calculations you performed, and discuss your analysis about the overall validity of your results Both members of the team must be part of the narration in the presentation Grading Rubric Possible Points Criteria and Point Range Calculation of Cost of Debt 12 0 3 4 6 7 9 10 12 Incorrect data or no debt data provided Incorrect cost of debt calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate debt data collected and correct cost of debt calculations made Calculation of Cost of Equity 12 0 3 4 6 7 9 10 12 Incorrect data or no equity data provided Incorrect cost of equity calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate equity data collected and correct cost of debt calculations made WACC Calculation 8 0 2 3 4 5 6 7 8 All elements of the WACC calculation are incorrect, or calculation not performed Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result Form 8 0 2 3 4 5 6 7 8 Poor writing and presentation skills, or no presentation provided Several problems noted in regard to writing and presentation skills Writing and presentation done well with a few minor errors Virtually no errors in writing or presentation Once again, your team is the key financial management team for your company The companys CEO is now looking to expand its operations by investing in new property, plant, and equipment In order to effectively evaluate the projects effectiveness, you have been asked to determine the firms weighted average cost of capital To determine the cost of capital, here is what you have been asked to do Go to Yahoo Finance (http finance yahoo com) and capture the income statement information for the company you selected (Be sure that your company has debt on their balance sheet This will be required in your project ) Enter your companys name or ticker symbol Your companys information should appear Click on the Financials tab, and select the income statement option Three years worth of income statements should appear Copy and paste this data into a spreadsheet Repeat step b above for the balance sheets of the company Click on Historical Prices Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above Calculate the Weighted Average Cost of Capital (WACC) for the company a Cost of Debt Determine the market value of the firms debt issues Be sure to review the firms 10 K Also, the website http finra markets morningstar com BondCenter may be of assistance You will need to calculate the firms composite YTM on its bonds This can be achieved by calculating a weighted average YTM for its bond issues After calculating the YTM for the bond issues, calculate the firms after tax cost of debt If the firms marginal tax rate cannot be identified in its 10 K, assume that the tax rate will be 35 Cost of Equity Calculate the firms cost of equity using the capital asset pricing model (CAPM) The formula for the CAPM is r i r f i (R Mkt r f ) Assume the risk free rate ( r f ) is the current rate of 10 year U S Treasury Bonds Calculate the market rate ( R Mkt ) by calculating the market return on the Standard Poors 500 for the past 2 calendar years The beta for the firm can be obtained from Yahoo Finance Calculate the WACC Determine the market capitalization of the firms common equity and preferred equity, if any Determine the firms capital structure based on the market value of the firms equity and debt The market value of the firms debt can be obtained from the Morningstar website, listed in the Cost of Debt section above iii As you recall, the formula for WACC is r WACC E ( E D ) r E D ( E D ) r D (1 T C ) Deliverable Prepare a narrated PowerPoint presentation using VoiceThread or WebEx that shows the steps you performed to calculate the WACC for your firm Feel free to embed your Excel spreadsheets in the presentation to demonstrate your calculations Be sure to discuss how the values were obtained or derived to arrive at your WACC result Finally, be sure to discuss any strengths or limitations in the calculations you performed, and discuss your analysis about the overall validity of your results Both members of the team must be part of the narration in the presentation Grading Rubric Possible Points Criteria and Point Range Calculation of Cost of Debt 12 0 3 4 6 7 9 10 12 Incorrect data or no debt data provided Incorrect cost of debt calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate debt data collected and correct cost of debt calculations made Calculation of Cost of Equity 12 0 3 4 6 7 9 10 12 Incorrect data or no equity data provided Incorrect cost of equity calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate equity data collected and correct cost of debt calculations made WACC Calculation 8 0 2 3 4 5 6 7 8 All elements of the WACC calculation are incorrect, or calculation not performed Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result Form 8 0 2 3 4 5 6 7 8 Poor writing and presentation skills, or no presentation provided Several problems noted in regard to writing and presentation skills Writing and presentation done well with a few minor errors Virtually no errors in writing or presentation Once again, your team is the key financial management team for your company The companys CEO is now looking to expand its operations by investing in new property, plant, and equipment In order to effectively evaluate the projects effectiveness, you have been asked to determine the firms weighted average cost of capital To determine the cost of capital, here is what you have been asked to do Go to Yahoo Finance (http finance yahoo com) and capture the income statement information for the company you selected (Be sure that your company has debt on their balance sheet This will be required in your project ) Enter your companys name or ticker symbol Your companys information should appear Click on the Financials tab, and select the income statement option Three years worth of income statements should appear Copy and paste this data into a spreadsheet Repeat step b above for the balance sheets of the company Click on Historical Prices Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above Calculate the Weighted Average Cost of Capital (WACC) for the company a Cost of Debt Determine the market value of the firms debt issues Be sure to review the firms 10 K Also, the website http finra markets morningstar com BondCenter may be of assistance You will need to calculate the firms composite YTM on its bonds This can be achieved by calculating a weighted average YTM for its bond issues After calculating the YTM for the bond issues, calculate the firms after tax cost of debt If the firms marginal tax rate cannot be identified in its 10 K, assume that the tax rate will be 35 Cost of Equity Calculate the firms cost of equity using the capital asset pricing model (CAPM) The formula for the CAPM is r i r f i (R Mkt r f ) Assume the risk free rate ( r f ) is the current rate of 10 year U S Treasury Bonds Calculate the market rate ( R Mkt ) by calculating the market return on the Standard Poors 500 for the past 2 calendar years The beta for the firm can be obtained from Yahoo Finance Calculate the WACC Determine the market capitalization of the firms common equity and preferred equity, if any Determine the firms capital structure based on the market value of the firms equity and debt The market value of the firms debt can be obtained from the Morningstar website, listed in the Cost of Debt section above iii As you recall, the formula for WACC is r WACC E ( E D ) r E D ( E D ) r D (1 T C ) Deliverable Prepare a narrated PowerPoint presentation using VoiceThread or WebEx that shows the steps you performed to calculate the WACC for your firm Feel free to embed your Excel spreadsheets in the presentation to demonstrate your calculations Be sure to discuss how the values were obtained or derived to arrive at your WACC result Finally, be sure to discuss any strengths or limitations in the calculations you performed, and discuss your analysis about the overall validity of your results Both members of the team must be part of the narration in the presentation Grading Rubric Possible Points Criteria and Point Range Calculation of Cost of Debt 12 0 3 4 6 7 9 10 12 Incorrect data or no debt data provided Incorrect cost of debt calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate debt data collected and correct cost of debt calculations made Calculation of Cost of Equity 12 0 3 4 6 7 9 10 12 Incorrect data or no equity data provided Incorrect cost of equity calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate equity data collected and correct cost of debt calculations made WACC Calculation 8 0 2 3 4 5 6 7 8 All elements of the WACC calculation are incorrect, or calculation not performed Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result Form 8 0 2 3 4 5 6 7 8 Poor writing and presentation skills, or no presentation provided Several problems noted in regard to writing and presentation skills Writing and presentation done well with a few minor errors Virtually no errors in writing or presentation Once again, your team is the key financial management team for your company The companys CEO is now looking to expand its operations by investing in new property, plant, and equipment In order to effectively evaluate the projects effectiveness, you have been asked to determine the firms weighted average cost of capital To determine the cost of capital, here is what you have been asked to do Go to Yahoo Finance (http finance yahoo com) and capture the income statement information for the company you selected (Be sure that your company has debt on their balance sheet This will be required in your project ) Enter your companys name or ticker symbol Your companys information should appear Click on the Financials tab, and select the income statement option Three years worth of income statements should appear Copy and paste this data into a spreadsheet Repeat step b above for the balance sheets of the company Click on Historical Prices Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above Calculate the Weighted Average Cost of Capital (WACC) for the company a Cost of Debt Determine the market value of the firms debt issues Be sure to review the firms 10 K Also, the website http finra markets morningstar com BondCenter may be of assistance You will need to calculate the firms composite YTM on its bonds This can be achieved by calculating a weighted average YTM for its bond issues After calculating the YTM for the bond issues, calculate the firms after tax cost of debt If the firms marginal tax rate cannot be identified in its 10 K, assume that the tax rate will be 35 Cost of Equity Calculate the firms cost of equity using the capital asset pricing model (CAPM) The formula for the CAPM is r i r f i (R Mkt r f ) Assume the risk free rate ( r f ) is the current rate of 10 year U S Treasury Bonds Calculate the market rate ( R Mkt ) by calculating the market return on the Standard Poors 500 for the past 2 calendar years The beta for the firm can be obtained from Yahoo Finance Calculate the WACC Determine the market capitalization of the firms common equity and preferred equity, if any Determine the firms capital structure based on the market value of the firms equity and debt The market value of the firms debt can be obtained from the Morningstar website, listed in the Cost of Debt section above iii As you recall, the formula for WACC is r WACC E ( E D ) r E D ( E D ) r D (1 T C ) Deliverable Prepare a narrated PowerPoint presentation using VoiceThread or WebEx that shows the steps you performed to calculate the WACC for your firm Feel free to embed your Excel spreadsheets in the presentation to demonstrate your calculations Be sure to discuss how the values were obtained or derived to arrive at your WACC result Finally, be sure to discuss any strengths or limitations in the calculations you performed, and discuss your analysis about the overall validity of your results Both members of the team must be part of the narration in the presentation Grading Rubric Possible Points Criteria and Point Range Calculation of Cost of Debt 12 0 3 4 6 7 9 10 12 Incorrect data or no debt data provided Incorrect cost of debt calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate debt data collected and correct cost of debt calculations made Calculation of Cost of Equity 12 0 3 4 6 7 9 10 12 Incorrect data or no equity data provided Incorrect cost of equity calculations Questionable data used Some errors in calculations presented Data is mostly accurate Correct calculations performed Accurate equity data collected and correct cost of debt calculations made WACC Calculation 8 0 2 3 4 5 6 7 8 All elements of the WACC calculation are incorrect, or calculation not performed Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result Form 8 0 2 3 4 5 6 7 8 Poor writing and presentation skills, or no presentation provided Several problems noted in regard to writing and presentation skills Writing and presentation done well with a few minor errors Virtually no errors in writing or presentation

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Once again, your team is the key financial management team for your company. The companys CEO is now looking to expand its operations by investing

Once again, your team is the key financial management team for your company. The companys CEO is now looking to expand its operations by investing in new property, plant, and equipment. In order to effectively evaluate the projects effectiveness, you have been asked to determine the firms weighted average cost of capital. To determine the cost of capital, here is what you have been asked to do.

Go to Yahoo Finance (http://finance.yahoo.com) and capture the income statement information for the company you selected. (Be sure that your company has debt on their balance sheet. This will be required in your project.)

Enter your companys name or ticker symbol. Your companys information should appear.

Click on the Financials tab, and select the income statement option. Three years worth of income statements should appear. Copy and paste this data into a spreadsheet.

Repeat step b. above for the balance sheets of the company.

Click on Historical Prices. Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above.

Calculate the Weighted Average Cost of Capital (WACC) for the company:

a.Cost of Debt

Determine the market value of the firms debt issues. Be sure to review the firms 10-K. Also, the website http://finra-markets.morningstar.com/BondCenter may be of assistance.

You will need to calculate the firms composite YTM on its bonds. This can be achieved by calculating a weighted-average YTM for its bond issues.

After calculating the YTM for the bond issues, calculate the firms after-tax cost of debt. If the firms marginal tax rate cannot be identified in its 10-K, assume that the tax rate will be 35%.

Cost of Equity

Calculate the firms cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is r_i = r_f + _i (R_Mkt - r_f).

Assume the risk-free rate (r_f) is the current rate of 10-year U.S. Treasury Bonds.

Calculate the market rate (R_Mkt) by calculating the market return on the Standard & Poors 500 for the past 2 calendar years.

The beta for the firm can be obtained from Yahoo! Finance.

Calculate the WACC

Determine the market capitalization of the firms common equity and preferred equity, if any.

Determine the firms capital structure based on the market value of the firms equity and debt. The market value of the firms debt can be obtained from the Morningstar website, listed in the Cost of Debt section above.

iii.As you recall, the formula for WACC is r_WACC = E (E + D) r_E + D (E + D) r_D (1 - T_C).

Deliverable

Prepare a narrated PowerPoint presentation using VoiceThread or WebEx that shows the steps you performed to calculate the WACC for your firm. Feel free to embed your Excel spreadsheets in the presentation to demonstrate your calculations. Be sure to discuss how the values were obtained or derived to arrive at your WACC result. Finally, be sure to discuss any strengths or limitations in the calculations you performed, and discuss your analysis about the overall validity of your results. Both members of the team must be part of the narration in the presentation.

Grading Rubric

	Possible Points	Criteria and Point Range
Calculation of Cost of Debt	12	0-3	4-6	7-9	10-12
Calculation of Cost of Debt	12	Incorrect data or no debt data provided. Incorrect cost of debt calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate debt data collected and correct cost of debt calculations made.
Calculation of Cost of Equity	12	0-3	4-6	7-9	10-12
Calculation of Cost of Equity	12	Incorrect data or no equity data provided. Incorrect cost of equity calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate equity data collected and correct cost of debt calculations made.
WACC Calculation	8	0-2	3-4	5-6	7-8
WACC Calculation	8	All elements of the WACC calculation are incorrect, or calculation not performed.	Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result.
Form	8	0-2	3-4	5-6	7-8
Form	8	Poor writing and presentation skills, or no presentation provided.	Several problems noted in regard to writing and presentation skills.	Writing and presentation done well with a few minor errors	Virtually no errors in writing or presentation.

Enter your companys name or ticker symbol. Your companys information should appear.

Click on the Financials tab, and select the income statement option. Three years worth of income statements should appear. Copy and paste this data into a spreadsheet.

Repeat step b. above for the balance sheets of the company.

Click on Historical Prices. Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above.

Calculate the Weighted Average Cost of Capital (WACC) for the company:

a.Cost of Debt

Determine the market value of the firms debt issues. Be sure to review the firms 10-K. Also, the website http://finra-markets.morningstar.com/BondCenter may be of assistance.

You will need to calculate the firms composite YTM on its bonds. This can be achieved by calculating a weighted-average YTM for its bond issues.

After calculating the YTM for the bond issues, calculate the firms after-tax cost of debt. If the firms marginal tax rate cannot be identified in its 10-K, assume that the tax rate will be 35%.

Cost of Equity

Calculate the firms cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is r_i = r_f + _i (R_Mkt - r_f).

Assume the risk-free rate (r_f) is the current rate of 10-year U.S. Treasury Bonds.

Calculate the market rate (R_Mkt) by calculating the market return on the Standard & Poors 500 for the past 2 calendar years.

The beta for the firm can be obtained from Yahoo! Finance.

Calculate the WACC

Determine the market capitalization of the firms common equity and preferred equity, if any.

iii.As you recall, the formula for WACC is r_WACC = E (E + D) r_E + D (E + D) r_D (1 - T_C).

Deliverable

Grading Rubric

	Possible Points	Criteria and Point Range
Calculation of Cost of Debt	12	0-3	4-6	7-9	10-12
Calculation of Cost of Debt	12	Incorrect data or no debt data provided. Incorrect cost of debt calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate debt data collected and correct cost of debt calculations made.
Calculation of Cost of Equity	12	0-3	4-6	7-9	10-12
Calculation of Cost of Equity	12	Incorrect data or no equity data provided. Incorrect cost of equity calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate equity data collected and correct cost of debt calculations made.
WACC Calculation	8	0-2	3-4	5-6	7-8
WACC Calculation	8	All elements of the WACC calculation are incorrect, or calculation not performed.	Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result.
Form	8	0-2	3-4	5-6	7-8
Form	8	Poor writing and presentation skills, or no presentation provided.	Several problems noted in regard to writing and presentation skills.	Writing and presentation done well with a few minor errors	Virtually no errors in writing or presentation.

Enter your companys name or ticker symbol. Your companys information should appear.

Click on the Financials tab, and select the income statement option. Three years worth of income statements should appear. Copy and paste this data into a spreadsheet.

Repeat step b. above for the balance sheets of the company.

Click on Historical Prices. Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above.

Calculate the Weighted Average Cost of Capital (WACC) for the company:

a.Cost of Debt

Determine the market value of the firms debt issues. Be sure to review the firms 10-K. Also, the website http://finra-markets.morningstar.com/BondCenter may be of assistance.

You will need to calculate the firms composite YTM on its bonds. This can be achieved by calculating a weighted-average YTM for its bond issues.

After calculating the YTM for the bond issues, calculate the firms after-tax cost of debt. If the firms marginal tax rate cannot be identified in its 10-K, assume that the tax rate will be 35%.

Cost of Equity

Calculate the firms cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is r_i = r_f + _i (R_Mkt - r_f).

Assume the risk-free rate (r_f) is the current rate of 10-year U.S. Treasury Bonds.

Calculate the market rate (R_Mkt) by calculating the market return on the Standard & Poors 500 for the past 2 calendar years.

The beta for the firm can be obtained from Yahoo! Finance.

Calculate the WACC

Determine the market capitalization of the firms common equity and preferred equity, if any.

iii.As you recall, the formula for WACC is r_WACC = E (E + D) r_E + D (E + D) r_D (1 - T_C).

Deliverable

Grading Rubric

	Possible Points	Criteria and Point Range
Calculation of Cost of Debt	12	0-3	4-6	7-9	10-12
Calculation of Cost of Debt	12	Incorrect data or no debt data provided. Incorrect cost of debt calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate debt data collected and correct cost of debt calculations made.
Calculation of Cost of Equity	12	0-3	4-6	7-9	10-12
Calculation of Cost of Equity	12	Incorrect data or no equity data provided. Incorrect cost of equity calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate equity data collected and correct cost of debt calculations made.
WACC Calculation	8	0-2	3-4	5-6	7-8
WACC Calculation	8	All elements of the WACC calculation are incorrect, or calculation not performed.	Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result.
Form	8	0-2	3-4	5-6	7-8
Form	8	Poor writing and presentation skills, or no presentation provided.	Several problems noted in regard to writing and presentation skills.	Writing and presentation done well with a few minor errors	Virtually no errors in writing or presentation.

Enter your companys name or ticker symbol. Your companys information should appear.

Click on the Financials tab, and select the income statement option. Three years worth of income statements should appear. Copy and paste this data into a spreadsheet.

Repeat step b. above for the balance sheets of the company.

Click on Historical Prices. Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above.

Calculate the Weighted Average Cost of Capital (WACC) for the company:

a.Cost of Debt

Determine the market value of the firms debt issues. Be sure to review the firms 10-K. Also, the website http://finra-markets.morningstar.com/BondCenter may be of assistance.

You will need to calculate the firms composite YTM on its bonds. This can be achieved by calculating a weighted-average YTM for its bond issues.

After calculating the YTM for the bond issues, calculate the firms after-tax cost of debt. If the firms marginal tax rate cannot be identified in its 10-K, assume that the tax rate will be 35%.

Cost of Equity

Calculate the firms cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is r_i = r_f + _i (R_Mkt - r_f).

Assume the risk-free rate (r_f) is the current rate of 10-year U.S. Treasury Bonds.

Calculate the market rate (R_Mkt) by calculating the market return on the Standard & Poors 500 for the past 2 calendar years.

The beta for the firm can be obtained from Yahoo! Finance.

Calculate the WACC

Determine the market capitalization of the firms common equity and preferred equity, if any.

iii.As you recall, the formula for WACC is r_WACC = E (E + D) r_E + D (E + D) r_D (1 - T_C).

Deliverable

Grading Rubric

	Possible Points	Criteria and Point Range
Calculation of Cost of Debt	12	0-3	4-6	7-9	10-12
Calculation of Cost of Debt	12	Incorrect data or no debt data provided. Incorrect cost of debt calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate debt data collected and correct cost of debt calculations made.
Calculation of Cost of Equity	12	0-3	4-6	7-9	10-12
Calculation of Cost of Equity	12	Incorrect data or no equity data provided. Incorrect cost of equity calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate equity data collected and correct cost of debt calculations made.
WACC Calculation	8	0-2	3-4	5-6	7-8
WACC Calculation	8	All elements of the WACC calculation are incorrect, or calculation not performed.	Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result.
Form	8	0-2	3-4	5-6	7-8
Form	8	Poor writing and presentation skills, or no presentation provided.	Several problems noted in regard to writing and presentation skills.	Writing and presentation done well with a few minor errors	Virtually no errors in writing or presentation.

Enter your companys name or ticker symbol. Your companys information should appear.

Click on the Financials tab, and select the income statement option. Three years worth of income statements should appear. Copy and paste this data into a spreadsheet.

Repeat step b. above for the balance sheets of the company.

Click on Historical Prices. Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above.

Calculate the Weighted Average Cost of Capital (WACC) for the company:

a.Cost of Debt

Determine the market value of the firms debt issues. Be sure to review the firms 10-K. Also, the website http://finra-markets.morningstar.com/BondCenter may be of assistance.

You will need to calculate the firms composite YTM on its bonds. This can be achieved by calculating a weighted-average YTM for its bond issues.

After calculating the YTM for the bond issues, calculate the firms after-tax cost of debt. If the firms marginal tax rate cannot be identified in its 10-K, assume that the tax rate will be 35%.

Cost of Equity

Calculate the firms cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is r_i = r_f + _i (R_Mkt - r_f).

Assume the risk-free rate (r_f) is the current rate of 10-year U.S. Treasury Bonds.

Calculate the market rate (R_Mkt) by calculating the market return on the Standard & Poors 500 for the past 2 calendar years.

The beta for the firm can be obtained from Yahoo! Finance.

Calculate the WACC

Determine the market capitalization of the firms common equity and preferred equity, if any.

iii.As you recall, the formula for WACC is r_WACC = E (E + D) r_E + D (E + D) r_D (1 - T_C).

Deliverable

Grading Rubric

Possible

Points

Criteria and Point Range

Calculation of Cost of Debt

0-3

4-6

7-9

10-12

Incorrect data or no debt data provided.

Incorrect cost of debt calculations

Questionable data used. Some errors in calculations presented.

Data is mostly accurate. Correct calculations performed.

Accurate debt data collected and correct cost of debt calculations made.

Calculation of Cost of Equity

0-3

4-6

7-9

10-12

Incorrect data or no equity data provided.

Incorrect cost of equity calculations

Questionable data used. Some errors in calculations presented.

Data is mostly accurate. Correct calculations performed.

Accurate equity data collected and correct cost of debt calculations made.

WACC Calculation

0-2

3-4

5-6

7-8

All elements of the WACC calculation are incorrect, or calculation not performed.

Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure.

One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure.

WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result.

Form

0-2

3-4

5-6

7-8

Poor writing and presentation skills, or no presentation provided.

Several problems noted in regard to writing and presentation skills.

Writing and presentation done well with a few minor errors

Virtually no errors in writing or presentation.

Enter your companys name or ticker symbol. Your companys information should appear.

Click on the Financials tab, and select the income statement option. Three years worth of income statements should appear. Copy and paste this data into a spreadsheet.

Repeat step b. above for the balance sheets of the company.

Click on Historical Prices. Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above.

Calculate the Weighted Average Cost of Capital (WACC) for the company:

a.Cost of Debt

Determine the market value of the firms debt issues. Be sure to review the firms 10-K. Also, the website http://finra-markets.morningstar.com/BondCenter may be of assistance.

You will need to calculate the firms composite YTM on its bonds. This can be achieved by calculating a weighted-average YTM for its bond issues.

After calculating the YTM for the bond issues, calculate the firms after-tax cost of debt. If the firms marginal tax rate cannot be identified in its 10-K, assume that the tax rate will be 35%.

Cost of Equity

Calculate the firms cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is r_i = r_f + _i (R_Mkt - r_f).

Assume the risk-free rate (r_f) is the current rate of 10-year U.S. Treasury Bonds.

Calculate the market rate (R_Mkt) by calculating the market return on the Standard & Poors 500 for the past 2 calendar years.

The beta for the firm can be obtained from Yahoo! Finance.

Calculate the WACC

Determine the market capitalization of the firms common equity and preferred equity, if any.

iii.As you recall, the formula for WACC is r_WACC = E (E + D) r_E + D (E + D) r_D (1 - T_C).

Deliverable

Grading Rubric

	Possible Points	Criteria and Point Range
Calculation of Cost of Debt	12	0-3	4-6	7-9	10-12
Calculation of Cost of Debt	12	Incorrect data or no debt data provided. Incorrect cost of debt calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate debt data collected and correct cost of debt calculations made.
Calculation of Cost of Equity	12	0-3	4-6	7-9	10-12
Calculation of Cost of Equity	12	Incorrect data or no equity data provided. Incorrect cost of equity calculations	Questionable data used. Some errors in calculations presented.	Data is mostly accurate. Correct calculations performed.	Accurate equity data collected and correct cost of debt calculations made.
WACC Calculation	8	0-2	3-4	5-6	7-8
WACC Calculation	8	All elements of the WACC calculation are incorrect, or calculation not performed.	Two errors noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	One error noted in the calculation relating to either cost of debt, cost of equity, or capital structure.	WACC Calculation utilizes appropriate cost of debt and equity and capital structure to arrive at a solid result.
Form	8	0-2	3-4	5-6	7-8
Form	8	Poor writing and presentation skills, or no presentation provided.	Several problems noted in regard to writing and presentation skills.	Writing and presentation done well with a few minor errors	Virtually no errors in writing or presentation.