The company: "Procter and Gamble Company” this is a real world

Added on - Sep 2019

Trusted by 2+ million users,
1000+ happy students everyday
Showing pages 1 to 1 of 2 pages
The company: "Procter and Gamble Company” this is a real world example, so youneed to show where you got the numbers fromUsing the 2015 balance sheet and 10k report find the following:WACC Project Checklist:1.Determine the firm’s rd from the 10-K report in the Note to the Long-termDebt, where rd = ∑(wdi*rdi), where wdi = the weight of debt for each bond andrdi is the coupon rate for each bond.Please regard equation 6.6 on page 247for a review of the methodology.2.Construct the capital structure of the firm to find the wd and we components ofthe WACC.Note that the dollar amount of long-term debt and the dollaramount of total equity should be utilized.Preferred equity dollar amountshould be included in the calculation if the firm still has preferred equityoutstanding.3.Find the firm’s beta.4.Determine the firm’s tax rate from the 10-K information.Please make sure toinclude the page number where you determined the firm’s tax rate in the 10-Kreport from the previous fiscal year.5.Find either the 1-year Treasury bill rate or the 10-year Treasury note rate at theclose of the firm’s fiscal year.If the risk-free rate is provided by the firm in the10-K, please utilize this percentage. Full credit will not be earned if the 4% rfrin the givens in the instructions is utilized.6.Find an appropriate rm percentage for the previous fiscal year.Full credit willnot be earned if the 8% rpm given in the instructions is utilized.7.Construct the current CAPM rs for the firm.Please review page 258, equation6.14.8.Construct the current WACC for the firm.Please review page 375, equation9.2.Note that you do not have to utilize the short-term debt portion in theequation.9.Calculate the beta unlevered.Please review page 611, equation 15-10.10.Calculate the new beta levered at plus or minus 5% or 10% intervals of wd inthe firm’s capital structure.Please review page 611, equation 15.9a.
Desklib Logo
You are reading a preview
Upload your documents to download or

Become a Desklib member to get access