I. Search Yahoo Finance, http://www.bloomberg.com or any other credible source to retrieve
the most recent income statement and balance sheet for a major leveraged corporation.
II. Provide these statements in proper format.
III. Also, retrieve the data on the companyâ€™s stock annual rate of return for the past 10 years.
IV. In addition, retrieve annual rate of return of a major financial index. Present this data as well.
V. Using the data on companyâ€™s stock rate of return and the indexâ€™s rate of return estimate beta
of the corporation. Make sure to adjust this value to obtain leveraged beta. Compare this
value with the value stated by the source. Retrieve the risk-free rate of return as the annual
interest rate of US treasuries. Based on these values estimate the expected annual rate of
return of the corporationâ€™s security. Using the financial statements mentioned above estimate
the annual rate of interest paid by the corporation (cost of debt). Also, find the tax rate and
capitalization ratio (proportions among equity and debt). Using these values that you have
found estimate the annual weighted cost of capital (WACC) of the corporation.
VI. Suppose that the corporation is offered an investment which has the following cash flows.
â— Based on WACC, Is this investment viable?
â— For each part above state the problem before answering the questions, provide clear justifications, explain your work in detail, and cite all references used for development of the content.
Provide your explanations and definitions in detail and be precise. Comment on your findings. Provide references for content when necessary. Provide your work in detail and explain in your own words. Support your statements with peer-reviewed in-text citation(s) and reference(s).
*Please refer to the Grading Criteria for Professional Assignments on page 10 of the syllabus for specific guidelines and expectations.