Proper Format of Financial Statements

Running head: REPORT 0
FINANCIAL MANAGEMENT
FEBRUARY 14, 2020
STUDENT DETAILS:

REPORT 1
Contents
I. Proper format of financial statements –...................................................................................2
II. Company’s stock annual rate of return for the past 10 years –................................................2
III. Annual rate of return of major financial index –..................................................................2
IV. Calculation of Weighted average cost of capital (WACC) -................................................2
V. Calculation of Net present value -..............................................................................................4
Evaluation of Investment –..........................................................................................................4
References........................................................................................................................................7
Appendix..........................................................................................................................................8

REPORT 2
I. Proper format of financial statements –
Refer appendix
II. Company’s stock annual rate of return for the past 10 years –
Refer Excel
III. Annual rate of return of major financial index –
Refer Excel
IV. Calculation of Weighted average cost of capital (WACC) -
Calculation of cost of equity using CAPM
Risk free rate 1.84%
Market risk premium 5.60%
Beta 1.15
CAPM 8.26%
Calculation of cost of debt -
Cost of debt -
Net finance cost ($) 748.00
Less: Tax @27.8% 209.44
After tax cost of debt 538.56
Borrowings amount 2,132.00
After tax cost of debt (%) [538.56/2132] 25.26%
Calculation of weights of debt and equity –
Market value weight Debt Equity Total
Market value of equity shares ($)
1,55,642.0
0
Add: Retained Earnings ($)
1,80,987.0
0
Value of debt (short term borrowings + long
term borrowings) ($)
34,459.0
0
Total 34,459.0 3,36,629.0 3,71,088.0

REPORT 3
0 0 0
Weights
0.0
9
0.9
1
Calculation of weighted average cost of capital -
Weighted Average cost of capital Debt
Equity
Shares Total
Cost of Finance 25.26% 8.26%
Market Weights 0.09 0.91
WACC 2.35% 7.50% 9.84%