Finance OCS Assignment 2015

Question # 00095894 Posted By: expert-mustang Updated on: 08/22/2015 01:36 PM Due on: 08/26/2015
Subject Finance Topic Finance Tutorials:
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OCS Assignment

This assignment follows from the previous WACC project. Here, you must determine what the optimum capital structure is for your firm. A sample spreadsheet is provided where you may input the data that you have already found for the WACC. The spreadsheet will use Hamada’s Equation to recalculate the levered betas based on the weights that you choose.

NOTE: You cannot just assume that your weights and your bond values are the same as the sample. You must choose the appropriate weights first based on the market value weights your firm currently has. Then, you must choose appropriate bond rates as you increase or decrease the weight for debt.

You must explain and reference how you chose your numbers and attach a copy of the spreadsheet.

Note that the spreadsheet has all the calculations for the WACC on the top portion, but Hamada’s Equation only uses the CAPM to refigure the levered beta and the new WACC for that beta.

Note for tutor: Let me know if you need more information like a sample spreadsheet.

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Tutorials for this Question
  1. Tutorial # 00090222 Posted By: expert-mustang Posted on: 08/22/2015 01:38 PM
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