Calculate the following for general mills

Reference no: EM13715223

Calculate the following for General Mills(GIS) for last three years

1) cost of debt
You should look for publicly traded bonds for the firm and the Yield to Maturity (YTM) for the 10 year term bond would be an appropriate rate. You may use www.finra.org or morningstar (bonds tab) to obtain information on publicly traded bonds. If your firm has no debt, you could leave this calculation out.

2) cost of equity
Using CAPM - requires a beta estimation (look for published betas on various websites like MSN money, Reuters) and published risk free rates (10 year US T-bonds) and published market risk premium (historical US market risk premium).

Alternatively, you could calculate the Market risk premium = [Return on Market - Risk free rate]. A proxy for Return on Market is usually a historical (long term, at least 30 years) return on a market index like S&P500. Take a look at the link below for the return on the market (Compound Annual Growth Rate (CAGR) on the S&P 500):
https://www.moneychimp.com/features/market_cagr.htm

3) cost of preferred stock
If your company does not have preferred stock, leave it out. If it does, then the yield on preferred stock would be your cost of preferred stock.

4) Weights of debt and equity
Use market weights for equity = share price * number of shares outstanding = market capitalization

Book weight for debt closely approximates market weight for debt. Ignore all accruals/payables - use only interest bearing debt from the balance sheet when calculating total debt.

Reference no: EM13715223

Questions Cloud

Calculate the ratio of the effusion rate of oxygen : Calculate the ratio of the effusion rate of oxygen (O2) to that of carbon dioxide gas (CO2). Express your answer in decimal form and calculate your answer to at least four sig figs.

What is its total talk time : Can someone help me solve this problem. The just released Apple I6 phone battery is rated at 3.82 V and 11.1 Wh of energy, for a total of 2915 mAh. What is its total talk time

Determine the electron-group arrangement : Determine the electron-group arrangement, molecular shape, and ideal bond angle(s) for each of the following.

Determine the stretch length of the spring : At the top of an inclined track, a spring is attached to a rod at one end and a dynamics cart at the other such that the spring stretches parallel to the track. Determine the stretch length of the spring

Calculate the following for general mills : You should look for publicly traded bonds for the firm and the Yield to Maturity (YTM) for the 10 year term bond would be an appropriate rate. You may use www.finra.org or morningstar (bonds tab) to obtain information on publicly traded bonds. If ..

Explain what is the ph of 15 ml of 1.9 m hcl diluted to .6 l : What is the pH of 15 ml of 1.9 M HCl diluted to .6 L. What about 54 ml of 2.5*10^-2 M HCl to 150 ml of 1.0*10^-2 M HI

What is the oscillator maximum speed : A 254g oscillator has a speed of 99.5cm/s when its displacement is 2.70cm and 85.0cm/s when its displacement is 5.50cm. What is the oscillator's Maximum speed

How long does it take the bullet to come to rest : A rifle with a barrel length of 65cm fires a 10g bullet with a horizontal speed of 400m/s. How long does it take the bullet to come to rest

How many moles of naoh are required to increase the ph : A buffer contains 0.50 mol NH4^+ and 0.50 mol NH3 diluted with water to 1.0 L. How many moles of NaOH are required to increase the pH of the buffer to 10.00? (pKa of NH4^+ = 9.25)

User Account

All Pages