Cost of Capital and Risk in Corporate Finance

First Part –

Key Assignment Draft – 800 Words

Choose a public company, and present findings from your financial analysis in a report. Your report must include the following:

  • Give a description of the operating profit margin.
  • Give a description of the asset turnover.
  • Give a description of the equity multiplier.
  • Give a description of the return on equity.
  • Give a description of the return on assets.
  • Calculate the operating profit margin. Explain your answer.
  • Calculate the asset turnover. Explain your answer.
  • Calculate the equity multiplier. Explain your answer.
  • Calculate the return on assets. Explain your answer.
  • Calculate the return on equity. Explain your answer.
  • What does the DuPont analysis describe about the company chosen?
  • Which ratio demonstrates the company’s weakest area? Explain your answer.

Part II

Using the same company from Part I, write a report of 800 words about the following:

  • Give a description of the weighted average cost of capital.
  • Give a description of the capital asset pricing model.
  • Give a description of the security market line.
  • Give a description of the cost of debt.
  • Calculate the weighted average cost of capital. Explain your answer.
  • Calculate the cost of debt. Explain your answer.
  • How would you restructure the firm’s debt? Explain your answer.

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