Assignment:

Review the Harvard Business School Case (Brief Case) - #4130, dated June 19, 2009

Consider the following in your analysis:

 The main goal for this case is for Janet Mortensen to append a sort of “user guide” in her 2007 calculations;

 If she did append a “user’s guide” what might be her guidance for different types of project analysis at Midland such as capital budgeting and financial accounting, performance assessments, M&A proposals, and stock repurchase decisions;

 how might the cost of capital numbers differ or guidance differ for division-level versus corporate-level decisions;

 what guidance might she provide with validating the components used to compute the WACC;

 how would you compute a cost of capital for the Petrochemical division;

 what ‘actual’ firm would you use now as a pure play for the Petrochemical division.

Grading on Fact Sheet:

• Overview and Assumptions - 10 points
  • Appropriateness of T-bond maturity used
  • Appropriateness of equity risk premium used
  • Appropriateness of using firm-level WACC for divisions
  • Approach to defining division-level cost of capital
• Computation of firm-level WACC - 5 points
• Computation of division-level cost of capital - 10 points
• Approach used to compute cost of capital for PetroChemical Division - 5 points
• User Guide Reccomendation - capital project valuation, asset projects, performance evaluation - 15 points
• Format and Content - 5 points
• Note
• • standard 1" margins
  • single-spacing (text)
  • double-spacing between paragraphs
  • no paragraph indentation (left justified)
  • size 12 font, Times New Roman, black text
  • italicized or bold font for section headings

Also

do the calculation

Fact sheet pages must be more than 3 to 4 pages

free Plagiarism.

See attachment which is Information to compute WACC based upon different capital structures.

See attachment which some examples of factshee

Use one image and use several graphs