- 31 Mar, 2021
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Home work
For your chosen corporation identify the information outlined below:
Visit the following website: https://www.sec.gov/edgar/searchedgar/companysearch.html. Type in the name of your corporation under Company Name and select search. Select your company by clicking on the corresponding CIK number. Navigate to and select the most recent 10-K (annual report) from the list by clicking on the Documents button. Select the 10-K form. Scroll down to the section on Consolidated Balance Sheets. Look up values for the Commercial Paper, Long-term Debt, and Total shareholders’ equity.
In your post, identify your company and write the amount of Commercial Paper, Long-term Debt, and Total shareholders’ equity. Based on these values, calculate and list weights for the WACC (i.e. the weight on short-term debt (commercial paper), long-term debt, and total stock (total common equity)).
Visit the following website: http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/wacc.htm. Locate the industry for your corporation and write your corporation, industry name, cost of equity, after-tax cost of debt, and cost of capital. Based on the weights found above, calculate an approximate WACC using the capital component costs (assume the after-tax cost of short-term debt is 2% below the after-tax cost of long-term debt). Compare the the WACC value to MicroDrive Inc. from your textbook.