Valuation and Optimal Capital Structure

FI-516 WEEK 2 MINI CASE ASSIGNMENT
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Select a study industrial or commercial comp all based in the United States, and listed on one of the major stock exchanges in the United States. Each student should select a contrary company. Avoid selecting an insurance company or a bank, as the financial ratios for these financial businesses are different. Write a 7 8 page double spaced cover answering and demonstrating with calculations and financial data the following questions:
1. What is the name of the company? What is the fabrication sector?
2. What are the operating encounters of the company?
3. What is the financial stake of the company (the debt to total capitalization ratio)?
4. Does the company have any preferred stock?
5. What is the capital structure of the company?: curt term portion of Long marches Debt, Long verge Debt, Preferred phone line (if any), and market value of Common Stock issued and outstanding?
6. What is the companys authorized actual genus Beta?
7. What would the Beta of this company be if it had no Long Term Debt in its capital structure? (Apply the Hamada Formula.)
8. What is the companys current Marginal Tax Rate?
9. What is the Cost of Debt, before and later on taxes?
10. What is the Cost of Preferred Stock (if any)?




11. What is the Cost of Equity?
12. What is the money dividend yield on the Common Stock?
13. What is the Weighted total Cost of Capital of the company?
14. What is the Price Earnings denary of the company?
15. How has the companys stock been performing in the last 5 years?
16. How would you assess the overall risk structure of the company in terms of its Operating Risks and pecuniary Risk (Debt to Capitalization Ratio)?
17. Would you invest in this company? wherefore? Or Why not?
18. The last page of your paper should be a Bibliography of the sources you used to prepare this paper.

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