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MBA, PHD
Phoniex
Jul-2007 - Jun-2012
Corportae Manager
ChevronTexaco Corporation
Feb-2009 - Nov-2016
Question description
Midland Energy Resources
Assignment:
Review the Harvard Business School Case (Brief Case) - #4130, dated June 19, 2009
Consider the following in your analysis:
1. The main goal for this case is for Janet Mortensen to append a sort of “user guide” in her 2007 calculations;
2. 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;
3. how might the cost of capital numbers differ or guidance differ for division
-level versus corporate-level decisions;
4. what guidance might she provide with validating the components used to
compute the WACC;
5. how would you compute a cost of capital for the Petrochemical division;
6. what ‘actual’ firm would you use now as a pure play for the Petrochemical
division.
@@@@@ in the link information about Midland Energy Resources you must use https://www.dropbox.com/sh/u75nte2z4oact7k/AACTFWY...
########### Very important
1.Overview and Assumptions:
A. Appropriateness of T-bond maturity used
B. Appropriateness of equity risk premium used
C. Appropriateness of using firm-level WACC for divisions
D. Approach to defining division-level cost of capital
2. Computation of firm-level WACC
3. Computation of division-level cost of capital
4. Approach used to compute cost of capital for PetroChemical Division
5. User Guide Reccomendation - capital project valuation, asset projects, performance evaluation
6. Format and Content
##### Note
1- pages must be more than 1 page and less than 4 pages
2- Grading on Fact Sheet:
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
3- Avoiding Plagiarism.
4- See attachment which is Information to compute WACC based upon different capital structures.
5- See the link which some examples of fact sheet in the link very important:
https://www.dropbox.com/sh/v2nznicvydwku61/AACOPiv...
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