The assigned firm is IBM

Conduct Sensitivity Analysis on WACC and Compose a Memorandum to the CFO Your group has been assigned to estimate the Weighted-Average-Cost-of-Capital (WACC) for your assigned firm, conduct relevant sensitivity analyses, and report your findings. At this point, you should decide whether to drop the firm's use of short-term debt from your estimate of WACC, or if you feel it is an important enough element of the capital structure to retain it in vour estimate. Conduct adequate sensitivity analyses of how factors that were problematic in estimation of WACC will affect your computations. See Handout #4, Page 13 for some guidance Present your results in an easily legible table (or tables). Prepare a succinct memorandum to the Corporate CFO (you will find their name) stating your estimate of the firm's WACC. You should briefly summarize your estimates, your central assumptions, and the results of any sensitivity analyses that you have conducted. Think about what information is essential to include in the text and what in appendices. You also should consider what is best presented in text form and what in tabular form Clearly, the CFO is a very sophisticated reader. What is the absolutely essential information he or she would want to know, to establish confidence in your estimate? The memorandum should be in proper business form. It should not be longer than one single-spaced page (though you should submit a double-spaced version for ease with editorial commentary). You should also append appropriate documentation to support your estimates, and these should be in acceptable format to present to a high-level corporate officer. They should be referenced in the main body of the memo, and it should be thoughtfully organized, and very easy for the reader to locate and understand the supporting material in the appendices. The CFO has also requested that you include a brief appendix to the main document, describing and justifying the assumptions that you used in the CAPM to estimate the required return on equity capital