Business, 16.04.2020 04:39 suzieuzie

(1) How are Mortensen’s estimates of the cost of capital used at Midland? How, if at all, should these anticipated uses affect the calculations? Mortensen’s estimates of the cost of capital are used at Midland for asset appraisals for capital budgeting and accounting, company performance assessments, mergers and acquisitions, and also stock repurchasing decisions. Since cost of capital is a variable of WACC calculations, it needs to be adjusted if it is more or less risky in regard to firm risk. It should also be used in performance assessments of the firm, but should also consider the current economic environment, the general industry cost of capital, and the size of the firm. Cost of capital is also needed to calculate stock price changes, essential knowledge for stock repurchasing. (2) Calculate Midland’s corporate WACC. Make sure to explain your specific assumptions about the various inputs that you used in your calculations. (3) Should Midland use a single corporate hurdle rate for evaluating investment opportunities in all its divisions, or should each division have their own cost of capital? (4) Compute a separate cost of capital for E&P and Marketing & Refining divisions. What causes them to differ from one another?

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 10:00

Frolic corporation has budgeted sales and production over the next quarter as follows. the company has 4100 units of product on hand at july 1. 10% of the next months sales in units should be on hand at the end of each month. october sales are expected to be 72000 units. budgeted sales for september would be: july august september sales in units 41,500 53,500 ? production in units 45,700 53,800 58,150

Answers: 3

Answer

Business, 22.06.2019 13:40

A.j. was a newly hired attorney for idle time gaming, inc. even though he reported directly to the president of the company, a.j. noticed that the president always had time to converse with the director of sales, calling on him to get a pulse on legal/regulatory issues that, as the company attorney, a.j. could have probably handled. a.j. also noted that the hr manager’s administrative assistant was the go-to person for a number of things that would make life easier at work. a.j. was recognizing the culture at idle time gaming.

Answers: 3

Answer

Business, 22.06.2019 15:40

Colter steel has $5,550,000 in assets. temporary current assets $ 3,100,000 permanent current assets 1,605,000 fixed assets 845,000 total assets $ 5,550,000 assume the term structure of interest rates becomes inverted, with short-term rates going to 10 percent and long-term rates 2 percentage points lower than short-term rates. earnings before interest and taxes are $1,170,000. the tax rate is 40 percent earnings after taxes = ?

Answers: 1

Answer

Business, 22.06.2019 23:00

Which of the following is true of website content? it should be refreshed periodically to keep customers coming back. once the content has been written and proofread it shouldn't be changed. grammatical errors are not a problem because the customer visits the site to purchase a product, not check the site's grammar. it should be limited to text and shouldn't include multimedia.

Answers: 1

Answer

You know the right answer?

(1) How are Mortensen’s estimates of the cost of capital used at Midland? How, if at all, should the...

Questions