FIN 370 Week 4 WACC and Corporate Investment Decisions
Purpose of Assignment
Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company’s weighted average cost of capital and use the analysis to make company investment decisions.
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Scenario: Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year’s dividend is $2.50 per share that is growing by 4% per year.
Prepare a minimum 700-word analysis including the following:
Format your paper consistent with APA guidelines.
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