What are some potential issues in using varying techniques

Assignment Help Management Theories

Reference no: EM131246452

Corporations often use different costs of capital for different operating divisions. Using an example, calculate the weighted cost of capital (WACC). What are some potential issues in using varying techniques for cost of capital for different divisions? If the overall company weighted average cost of capital (WACC) were used as the hurdle rate for all divisions, would more conservative or riskier divisions get a greater share of capital? Explain your reasoning. What are two techniques that you could use to develop a rough estimate for each division's cost of capital?

Reference no: EM131246452

Questions Cloud

Discuss the effects of nafta : World Trade - Discuss the effects of NAFTA on: the United States, Canada, and Mexico. Is the European Union (EU) the real competitor of the U.S. in world trade? What other nations or groups of nations are now in the picture? (Support for your posi..

Compare and contrast the two sets of standards : Discuss the most salient components of these standards. Which of these standards, or combination of standards, should be at the forefront of a center's practices in order to promote a safe and healthful environment for children? What would their i..

What are the market equilibrium price and quantity : 1. Suppose that the market demand curve is given by Qd = 210 - 3P and the market supply curve is given by Qs = 4P. (a) What are the market equilibrium Price and Quantity? (b) Calculate Consumer Surplus and producer Surplus.

How would you defend this position : Some people believe that individuals working in an organization have a basic human right to satisfaction with their work and to the opportunity to grow and develop. How would you defend this position? How would you argue against it?

What are some potential issues in using varying techniques : What are two techniques that you could use to develop a rough estimate for each division's cost of capital?

Marginal product of labor : How your organization's production function is related to its marginal product of labor. How your organization's marginal product of labor is related to the value of its marginal product. How your organization's marginal product is related to its dem..

Identify the main competitors for each selected company : Choose any two companies that are in the same industry and listed on the NYSE or any other exchange. Collect the financial information for these two companies and make sure you have information that includes balance sheets, income statements, and ..

Economy in short-run equilibrium : Suppose the economy is a self-regulating, the price level is 132, the demand of Real GDP is $4 trillion, the quantity supplied of Real GDP in the short run is $3 .9 trillion, and the quantity supplied of Real GDP in the long run is $4.3 trillion. ..

Firm profit levels will characerize the long-run equilibrum : We can use the Cournot model to derive an equilibrum industry structure. For this purpose, we will define an equilibrum as that structure in which no firm has an incentive to leave or enter the industry. If a firm leaves the industr. Find the long-ru..

User Account

All Pages