Pioneer Petroleum Wacc

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    Wacc

    capital (new stock issues) exceeds the cost of internal capital by the amount of issuance costs WACC and Its Importance Definitions The weighted average (by proportion of cost in the capital structure) of the after-tax cost of debt, the after-tax cost of preferred stock, and the cost of common equity All capital sources included Common stock Preferred stock Bonds Long-term debt Weighting of WACC components can be done at book value or market value Investors likely to prefer market value for

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    Pioneer Petroleum Corporation

    questions: 1. Does Pioneer estimate its overall corporate weighed average cost of capital correctly? If not, re-estimate the WACC (showing and/or explaining your calculations). 2. Should Pioneer use a single corporate cost of capital or multiple divisional hurdle rates in evaluating projects and allocating investment funds among divisions? Why or why not? If multiple rates are used, how should they be determined? 3. How should Pioneer set capital budgeting criteria

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    Samsung Wacc

    WACC Example: A firm is considering a new project which would be similar in terms of risk to its existing projects. The firm needs a discount rate for evaluation purposes. The firm has enough cash on hand to provide the necessary equity financing for the project. Also, the firm: - has 1,000,000 common shares outstanding - current price $11.25 per share - next year’s dividend expected to be $1 per share - firm estimates dividends will

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    Petroleum

    Republic of the Philippines Palawan State University Puerto Princesa City, Palawan College of Engineering, Architecture and Technology Department of Petroleum and Mining Engineering Feasibility Study A partial requirement for the course PET 56 - Plant Design Submitted by: Schindler P. Marang Submitted to: Engr. Isaac Yap Table of Contents I. Project Name …………………………………………………………………… Pg. 1 II. Project Description ……………………………………………………………. Pg. 1 III. Project Location ………………………………………………………………

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    Wacc

    the WACC From a Balance Sheet | eHow.com Page 1 of 2 Print Article Discover the expert in you. How to Calculate the WACC From a Balance Sheet By Morgan Adams, eHow Contributor Weighted average cost of capital (WACC) is a calculation of a company's cost of capital, or the minimum that a company must earn to satisfy all debts and support all assets. The calculation includes the company's debt and equity ratios, as well as all long-term debt. Companies usually do an internal WACC calculation

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    Wacc

    CALCULATION of WACC for Quarter 2 (Based on the “Summary Data” from Sample Quarter 1) What is the market value of the capital raised by debt? (for debt, book value approx = market value) Short-term Loans Maturing $ 0 Intermediate Term Debt Maturing $1,850,000 Current Liabilities Bond Maturing $1,200,000 Intermediate Loans 2 year $ 937,500 3 year $ 0 Long Term Liabilities Bonds $1,200,000 Total Capital Raised by Debt $5,187,500 What is the market

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    Petroleum Retailing

    Proceedings of the 2010 International Conference on Industrial Engineering and Operations Management Dhaka, Bangladesh, January 9 – 10, 2010 Management of Supply Chain in Petroleum Corporations in India Surajit Roy LPG Operations, Indian Oil Corporation Ltd. Mumbai 400053, India R. S. Dhalla Microbiological Consultants Mumbai 400007, India Abstract Supply chain initiatives have become a critical part of firms operations. Success is increasingly being dictated by how well a company can control

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    Pioneer Petroleum Corporation

    ADMINISTRACION BANCARIA Antes de hablar sobre lo que es la administración bancaria debemos saber, los que son los bancos y de que se encargan. Las actividades de los bancos dan origen a las operaciones bancarias, que estas se clasifican en fundamentales y accesorias. La actividad bancaria es doble: intermedia y directa, de la cual la mas importante es la intermediaria. Decimos que la actividad intermediaria, aquella actividad o acción que realizan los bancos para captar recursos disponibles en

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    Petroleum

    Global Business and Economics Research Journal ISSN: 2302-4593 Vol. 2 (5): 102 - 115 The impact of petroleum on economic growth in Nigeria Michael Baghebo Niger Delta University, Bayelsa State, Nigeria baghebomichael@yahoo.com Timothy Okule Atima Niger Delta University, Bayelsa State, Nigeria Abstract The study examines the impact of petroleum on economic growth of the Nigerian economy. Data covering the period 1980-2011 was collected from the Central Bank of Nigeria Statistical Bulletin, and

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    Pioneer Petroleum Case Analysis

    production from existing wells. Figure 26 data Shows reduced net income in 2009, relative to 2008, from FRS foreign refining/marketing operations was because of decreased income from both consolidated and unconsolidated operations. Worldwide petroleum demand fell slightly in 2009, primarily due to lower North American and OECD Europe consumption (Figure 26), putting downward pressure on prices and revenues. People downgraded from higher fuel consuming vehicles to more fuel efficient cars. Further

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    Wacc Example

    company has been in business for over 120 years and employed more than 80,000 individuals. Janet Mortensen, the senior vice president of project finance for Midland Energy Resources, has been asked to calculate the weighted average cost of capital (WACC) for the company as a whole, as well as each of its three divisions as part of an annual budgeting process. Midland’s Three Divisions: Exploration & Production Oil exploration and production (E&P) is Midland’s most profitable business, and its net

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    Nike Wacc

    discount rate, we scrutinize the process Joanna used in calculating the Weighted Average Cost of Capital (WACC). The cost of capital is the required return expected by investors, based on the risks involved. WACC is calculated by summing the proportional market value cost of equity and debt. By determining WACC, investors can discount future cash flows of a company to find the intrinsic value. WACC is subjective to the estimates for the cost of equity, so we have to determine what method of finding

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    Pionner Petroleum Corporation

    Background: The Pioneer Petroleum Corporation is a hydrocarbons-based company, concentrating on oil, gas, coal, and petrochemicals. One of the critical problems confronting management and the board of Pioneer was the determination of a minimum acceptable rate of return on new capital investments. The company's basic capital budgeting approach was to accept all proposed investments with a positive net present value when discounted at the appropriate cost of capital. Further, the company is contemplating

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    Pioneer Petroleum

    I. Introduction and Article Overview The article is about the inflation problem faced by United States in Sep 2005 because of the increase in the oil prices caused by external factors like Hurricanes, Katrina and Rita. There was an increase in the demand for the oil because of the Gulf Coast Hurricanes which disabled oil rigs, refineries & pipelines and posed them to finally shut down. On the other hand there was still tight supply of oil in the market. In this context analysts had different point

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    Pioneer Petroleum

    Pioneer Petroleum Corporation One of the critical problems confronting management and the board of Pioneer Petroleum Corporation was the determination of a minimum acceptable rate of return on new capital investments, The company’s basic capital budgeting approach was to accept all proposed investments with a positive net present value when discounted at the appropriate cost of capital. At issue was how the appropriate discount rate would be determined. The company was weighing two alternative

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    Pioneer Petroleum

    Pioneer Petroleum Corporation’s (PPC) has been through a diverse amount of changes throughout the years. They were originally were a merger of several different independent firms operating in the oil refining, pipeline transportation, and industrial chemicals fields. PPC then integrated vertically into exploration and production of crude oil and marketing refined petroleum products, but horizontally into plastics, agricultural chemicals, and real estate development. They decided to restructure

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    Pioneer Petroleum

    Pioneer Petroleum Corporation Ryan Rhodes Dr. Bacon February 18, 2009 Table of Contents Introduction Background……………………………………………………………….. Pg. 3 Major Problems……………………………………………………………. Pg. 5 Analysis Alternative Courses of Action………………………………………………Pg. 6 Analysis of Alternatives……………………………………………………. Pg. 6 Conclusion Suggested Course of Action………………………………………………... Pg. 8 Introduction Background Pioneer Petroleum was formed in 1924 with the merger of several

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    Mw Petroleum Case Study

    In less than five, double-spaced, typewritten pages, plus any exhibits, please answer the following questions about MW Petroleum Corp. This assignment is worth a maximum of 100 points. 1. (10 points.) Apart from any quantitative analysis, are there any reasons to anticipate that Apache Corporation’s acquisition of MW Petroleum might be a positive net present value activity for Apache, for Amoco? Explain. This looks like an attractive deal for both parties. Amoco does many things well, but managing

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    Pioneer

    Quantum Pioneers: Max Planck On April 23, 1858 Max Karl Ernst Ludwig Planck was born in Kiel, Germany. At the age of nine his interest in physics and mathematics was developed by his teacher Hermann Muller. When he graduated at the age of seventeen he decided to choose physics over music for his career. He in turn did independent studies primarily on Rudolf Clausius' writings of thermodynamics which inspired him and in July 1879 he received his doctoral degree at the age of twenty-one. After

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    Wacc

    discounted cash flow (DCF) model with NESA’s WACC assumed to be the same as those of our company’s at 14%. However, it fails to address the increased risk of a South African mining operations and the fact that this project is for the extraction of iron, not gold as is customary of New Earth Mining. The accounting officer also used a DCF model using a WACC of 24%, including a 10% added premium. This approach is more accurate than the previous one as the modified WACC incorporates elements of risk and is based

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    Wacc

    should always use the market value weights to calculate WACC. In practice, firms do use the book value weights. Generally, there will be difference between the book value and market value weights, and therefore, WACC will be different. WACC, calculate using the book value weights, will be understand if the market value of the share is higher than the book value and vice versa. Why do managers prefer the book value weights for calculating WACC? Beside the simplicity of the use, managers claim

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    Pioneer Petroleum

    Pioneer Petroleum Cases Analysis  The Problem:  Pioneer Petroleum Corporation (PPC) has two major problems that are interfering with the goal of the firm to maximize shareholder wealth. The first is that PPC has been calculating their weighted average cost of capital incorrectly, by incorrectly calculating their after tax cost of debt and their cost of equity. This miscalculation has subjected PPC to more risk and has hurt the company’s ability to make appropriate investment decisions. This has

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    Pioneer Petroleum

    Taylor Anderson INTRODUCTION Background Pioneer Petroleum was founded in 1924, through a merger within industrial, pipeline transportation, and refining fields. PP has evolved over the last 60 years into a company that now also works with agricultural chemicals, plastics, and real estate development concentrating in gas, oil, petrochemicals, and coal. In 1990, PP improved their coker and sulfur recovery facility to make their refining process more efficient and in turn has become one of the

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    Mw Petroleum

    Company Name: MW Petroleum Amoco Corporation was the fifth largest oil company in United States with 28 billion in operating revenues and 1.9 billion in net income. The low oil prices in the 1980s depressed the profitability of many oil companies and most of which responded with downsizing and other cost cutting measures aimed at overhead expenses. Amoco had already sold more than 750 million worth of small properties, which it felt could be more economically operated by companies with low overhead

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    Petroleum

    Petroleum is formed by the remains of fossilized plants and animals that became buried in the ocean under silt and sand. It takes millions of years for its formation. We are depleting it at a rapid pace and that is why it is considered a non-renewable resource. There are over 4,000 oil fields around the world. One of the biggest oil fields is Ghawar, in Saudi Arabia. They produce about 4.5 million barrels of oil per day. There are three stages of oil extraction; Primary, Secondary, and Tertiary

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    Pioneer Petroleum

    Cost of Capital _ Pioneer Petroleum Corporation Copyright © 1991 by the President and Fellows of Harvard College. Harvard Business School Case 292-011. One of the critical problems confronting management and the board of Pioneer Petroleum Corporation in July 1991 was the determination of a minimum acceptable rate of return on new capital investments. The company's basic capital budgeting approach was to accept all proposed investments with a positive net present value when discounted at

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    Pioneer Petroleum

    Pioneer Petroleum is a multinational corporation that is in position to capitalize on investments all around the World. Within the industry Pioneer’s gasoline are among the cleanest burning fuels. They are better position than most to meet strict environmental guidelines as they currently have clean efficient running plants positioned to capitalize on less polluted products. Also Pioneer Petroleum is heavily involved in exploration and devilment. From 1924 to the present, pioneer has been able

    Words: 1482 - Pages: 6

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    British Petroleum

    Carrol BUS 475 Business and Society Introduction The Anglo-Persian Oil Company which is now known as British Petroleum (BP) was founded in 1909 and is one of the world’s leading international gas and oil companies. The multinational British company’s headquarters is located in London, United Kingdom and is one of the five largest oil companies in the world. The pioneer of the Middle Eastern oil industry, BP discovered oil in Iran before World War I and eventually became involved in all

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    Walmart Wacc

    Wal-Mart and Target WACC We computed the WACC for Wal-Mart and Target based on their most current financials. The weights of debt and equity were obtained from MorningStar.com. The risk free rate is the current rate for 30 year treasuries, and the cost of debt is the current 20 year rate on corporate bonds rated AA and A+. The tax rates were estimated by dividing the taxes paid from the operating income from Wal-Mart and Targets income statements. The market risk premium was obtained from the

    Words: 473 - Pages: 2

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    British Petroleum

    Student ID British Petroleum case study 1. Company background 2.1. Amoco Oil Amoco Oil, previously known as ''Standard Oil of Indiana'', started of small in 1889; consisting of only one faciliy near Whiting, Indiana, but with a huge name backing it up – John D. Rockefeller. By Decemeber 1997, when the talks of a merger/joint venture started Amocco had $32.4 billion in assets and operated in 30 countries with 43,400 employees. The company's business consisted of three main segments:

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    Wacc

    = $10,000,000 1. Calculate the firm's WACC = 50% (4%)(1-40%) + 20%(12%) + 30%(6%) = .50(.04)(1-.40) + .20(.12) + .30(.06) = 0.012 + .042 = .054 or 5.4 % 2. If, as the firm's CFO, you wished to lower the WACC, make up a set of new dollar figures using different amounts of common stock, preferred stock, and long-term debt that would lower the WACC. Show the calculations to demonstrate that the new capital structure has a lower WACC than the original structure. Capital | Debt

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    Lenovo Wacc

    country risk premium (.9%), and the default spread of .75%. Weighted Average Cost of Capital: WACC = (Rd) (1-t) (wd) + (Re) (we) = (4.24%) (1-.25) (.081) + (5.82%) (.919) = 5.61% Given the industry debt to equity ratio of .0883 and Lenovo’s current market capitalization of about $16.2 billion, I was able to calculate a capital structure for Lenovo of 8.1% debt and 91.9% equity. I then used the standard WACC formula to calculate a final cost of capital of 5.61%. Appendix: Equity risk premium: I used

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    Pioneer Company

    The pioneer company I have chosen for this assignment is Siemens. Siemens is a very successful German company founded in 1888 by Werner Siemens. It still remains as one of the world’s leading companies in the electronics sector, offering products in multiple industries as automation, lightning, medical and power. So it can be said that Siemens has overall a very high expertise regarding the electronic industry. The founder was a very innovative engineer, who came up with numerous new ideas and

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    Mw Petroleum

    each? How much is the whole portfolio worth? 5. Assuming a sale goes through, how does Apache exercise each of the various options? When should it do so? BACKGROUND In a case prepared by Barbara Wall at the Harvard Business School, entitled MW Petroleum Corporation A, (doi:9-295-029; 1994), she stated that the 1980’s had been a difficult decade for the oil industry. Profitability of oil companies declined due to low prices; and most of these firms responded with cost-cutting measures. Many top companies

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    Wacc

    = 800 Cost of Equity = Risk Free Rate + AVG Beta (Market Risk Premium Rate) =8% + 1.15 (5.5%) = 14.33% Cost of Capital = Cost of Equity (Risk Free Rate) + YTM (1- Tax Rate)(Debt Portion) = 14.33% (0.8) + 10% (1-0.4) (0.2) = 12.66%  Therefore WACC = 12.66%. This value can be used to discount any project ii. The firm is proposing borrowing an additional RM200 million in debt and repurchasing stock. If it does so its rating will decline to A, with a market interest rate (yield to maturity)

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    Quality Pioneers

    Total Quality Pioneers Paper xxxxxxxx Quality Management and Productivity MGT/449 xxxxxx xxx Introduction People are confronted with scenarios concerning quality nearly every day. The word or notion of quality can be defined a number of ways. Some think quality should be determined by individual standards and expectations, while others believe quality is an ever changing state. Goetsch and Davis systematically broke down the elements of quality and determined that “quality is a dynamic

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    Financial Pioneer Petroleum

    Interim-results: Getting a foothold in the plastic’s market as a green ( see background on plastics, they use oil derivatives as a source ), easy to use and at a fair price ( equal to plastics, is this doable? ) To achieve this early investments in to more R&D have to be done to improve/optimise and finalise the product (also to be used in the existing molds used for plastics). It is hard to impossible to sell our product if it is not finished. Investments in marketing, in our already existing

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    Pioneer Petroleum

    Ramon V. Del Rosario College of Business Master of Business Administration Financial Management FNC535M RCBC Plaza Room No. 526 “Big City Trust Company” Case Analysis & Corporate Strategy Group 4 Report Estepa, Joan Carla E. | Member | BSC Management, Corporate Focus | Reyes, Corinne Erlyn L. | Member | BA Humanities with Professional Certificate in Business Management | Yan, Lee Rainier C. | Member | B.S. Chemical Engineering | Dean Atty. Joe-Santos Balagtas Bisquera MBA

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    Pioneer Petroleum

    Daniel Hughes FINA 450 MID TERM Pioneer Petroleum Corporation Case 2-27-13 Background: Formed in 1924 by a merger of several firms, Pioneer Petroleum Corporation (PPC) is in the business of refining oil, building pipeline transportation and creating industrial fields. Pioneer is currently one of the primary producers of crude oil in the United States and is one of the top producers of Alaska crude oil. PPC is currently the lowest cost refiner on the western side of the globe, and has been

    Words: 1208 - Pages: 5

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    Wacc Project

    WACC Project On Amazon Due Date: January 16, 2016 Name: Professor Finding the weighted average cost of capital for Amazon.com Ticker: AMNZ Amazon is an American publically traded company and is one of the largest retailing firms headquartered in Seattle, Washington. The reason why I chose this firm is that it has equity, debt and lease payments in its capital structure. The following are the calculations performed in order to determine the WACC for the firm. Cost of debt According to

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    Encana Wacc

    16.1% rs = (Do (1+ g) / Po – F) + g rs = 0.28 (1+0.1611) / 56.75 (1- 0.05) + 0.1611 rs = 0.325108/53.9125 +0.1611 rs = 16.713% Average rs = (16.713+16.519)/2 = 16.616% WACC: The WACC equation is the cost of each capital component multiplied by its proportional weight and then summing:  WACC = rD (1- Tc )*( D / V )+ rE *( E / V ) Where, Re = cost of equity Rd = cost of debt E = market value of the firm's equity D = market value of the firm's debt V = Total Capital

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    Pioneer Petroleum Corporation (Ppc)

    Company Background Pioneer Petroleum Corporation (PPC) was formed as a result of several independent firms that operate in oil refining, pipeline transportation, and industrial chemical field merging together. The company has been through several changes since it was established in 1924 and over the years it became an integrated company with many products and services such as plastics, agriculture chemicals, and real-estate development. In 1985, PPC became a hydro-carbons based company, concentrating

    Words: 906 - Pages: 4

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    Wacc Case

    The WACC Case (Week 5) Question 1 In order to estimate the equity betas of each company, first, we have to calculate the monthly rates of returns: Rate of returni = (〖Price〗_i- 〖Price〗_(i-1))/〖Price〗_(i-1) Then, we can estimate the equity betas as follows: βe = (Cov (R_p, R_Mkt))/(Var(R_Mkt)) ,where Rp is the return of a specific stock (Unilever, Royal Dutch Shell, Randstad) and RMkt is the return of the market (AEX Index). We used Excel to compute the covariance (COVAR) and the variance

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    Wacc

    investors expect to earn a minimum return. 3. Weighting the components. Finally, we weight the cost of each kind of capital by the proportion that each contributes to the entire capital structure. This gives us the Weighted Average Cost of Capital (WACC), the average cost of each dollar of cash employed in the business.  

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    Capm - Wacc

    inversionistas-accionistas de la empresa en el año 2010? re= rf+ βrm-rf+rcrp re= .0403+0.89.0903-.0403+.0154 re= 10.02% 2) En base a lo anterior, ¿cuál es el costo de capital promedio ponderado (WACC) de la empresa para el ejercicio 2010 con 0 deuda y 20 por ciento de deuda? WACC= rdDV+reEV WACC1= .06870+.10021=10.02% WACC2= .06870.2+.10020.8=0.0137+ 0.0801 WACC2= .0938=9.38% 3) ¿Qué significa que la Beta de la empresa haya pasado de 0.89 a 0.95 de 2010 a 2011?. R

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    Wacc

    calculator, input the following: CF0 = 0, CF1 = 2.40, and CF2 = 60.99 (2.88 + 58.11) and then enter I/YR = 12.3 to solve for NPV = $50.50. Question 1. Rollins Corporation (RC) is estimating its weighted average cost of capital. (WACC). Its target capital structure is 20% debt, 20% preferred stock and 60% common equity. Its outstanding bonds have a 12% coupon rate, paid semiannually, a current maturity of 20 years, and sell in the marketplace for $1,000. RC could sell at par, $100

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    Pioneer Petroleum

    Pioneer Petroleum Case Analysis Pioneer Petroleum Cases Analysis The Problem: Pioneer Petroleum Corporation (PPC) has two major problems that are interfering with the goal of the firm to maximize shareholder wealth. The first is that PPC has been calculating their weighted average cost of capital incorrectly, by incorrectly calculating their after tax cost of debt and their cost of equity. This miscalculation has subjected PPC to more risk and has hurt the company’s ability to make appropriate

    Words: 346 - Pages: 2

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    Pioneer

    Total Quality Pioneers Total Quality Pioneers Quality is something people always look in particular products and services. The quality of the service is what cause businesses to have repeat customers. On the other hand, if the quality is poor then most people will not return. The paper will define what quality, the elements, is and how the elements made the total quality pioneers successful. Most people define quality in different ways, views and aspects. People measure quality

    Words: 434 - Pages: 2

  • Free Essay

    Wacc

    that WACC is the equity of the firm divided by the debt plus equity times the required return of equity plus the debt divided by the debt plus equity times one minus the marginal corporate tax rate on the project times the required return for debt. This should equal one minus the market value proportion of debt financing times the required return for equity plus the market value proportion of debt financing times one minus the marginal tax rate times the required return for debt. The WACC is expressed

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    Wrigley's Wacc

    the Net effect on WACC is uncertain as it really depends on the level of debt. But it is rational to think in the way that the cost of capital would start increasing  after a certain point when more debt is used, because at that point the cost outweigh the benefit. So, coming back to our case, assuming that the company issued 3 billion in debt, we will do some calculation to see how the change in capital structure affect the company’s WACC. This is how we calculated the WACC before the 3 billion

    Words: 297 - Pages: 2

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