Reference no: EM131312905
Vale S.A. is a publicly traded company (symbol: VALE) that engages in the research, production, and sale of iron ore, nickel, copper, and other precious metals. On February 26, 2016, Moody’s downgraded the VALE credit rating to “junk” status, citing a prolonged downturn in the commodities space.
You work for a consulting firm that specializes in asset valuation, and have been tasked with calculating the weighted average cost of capital with taxes (WACC with taxes) for VALE. Assume that the long-term risk-free rate is currently 3 percent and that the market risk premium is 5 percent.
a) Calculate the expected return on debt for VALE. Because the VALE credit rating has been downgraded to “junk”, you may use the reported beta of the SPDR Barclays High Yield Bond fund (symbol: JNK) as a proxy for the beta of debt for VALE. The JNK beta can be found on Google Finance (but not Yahoo! Finance).
b) Calculate the WACC with taxes for VALE. Market capitalization, beta of equity, and book value of debt (use Total Liabilities from the balance sheet dated December 31, 2015) can all be found on Google Finance. Use a corporate federal tax rate of 34 percent in your calculation. Report all of the numbers used to calculate the WACC with taxes.
|
Implement a new version of the color image adt
: Implement a new version of the Color Image ADT using three 1-D arrays to store the red, green, and blue components of each pixel. Apply the row-major formula from Section 3.3 to map a specific pixel given by (row, col) to an entry in the 1-D array..
|
|
Understand financial side of healthcare organization
: Why does an operations manager need to understand the financial side of the healthcare organization? How are the three financial statements related and what does the information measure?
|
|
Uses the straight-line method to amortize bond premium
: Yung Corporation sold $2,485,000, 6%, 5-year bonds on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on January 1. Yung Corporation uses the straight-line method to amortize bond premium or discount.
|
|
Write about the scale gas and the future developing
: Write about the scale gas and the future developing.Also describe Industry analysis,Conclusions from industry analysis, Issue identification,Alternatives for the industry etc.
|
|
Calculate the expected return on debt for vale
: Vale S.A. is a publicly traded company (symbol: VALE) that engages in the research, production, and sale of iron ore, nickel, copper. Calculate the expected return on debt for VALE. Because the VALE credit rating has been downgraded to “junk”, you ma..
|
|
View or conception of ethics changed
: Over the course of the past 8 weeks, has your view or conception of ethics changed in any way? If yes, is there a specific moment you can identify and describe that triggered the change (a reading(s), or posting(s), discussion(s) with colleague(s)..
|
|
Have you ever worked in a cohesive team
: Have you ever worked in a cohesive team? How about a team that wasn't cohesive? What were the distinguishing characteristics in each of your circumstances?
|
|
What is the time-complexity of the printcalendar() function
: Implement a function named printCalendar() that accepts a Date object and prints a calendar for the month of the given date. For example, if the Date object passed to the function contained the date 11/5/2007, the function should print
|
|
Application of knowledge within an organization
: Knowledge Management (COMP 0364.1) Compare and contrast strategies for the capture, organization, dissemination and application of knowledge within an organization - Carry out an organizational KM audit.
|