Estimate the before-tax and after-tax component cost of


Mini-Project 3: Weighted Average Cost of Capital: Find 2016 financial statements for Target Store from UHV Mergent Online database, Yahoo! Finance, Google Finance, or other finance sources.

(1) Estimate the weights of capital (debt, preferred stock, and common stock) for the company.

(2) Estimate the before-tax and after-tax component cost of debt for the firm.

(3) Estimate the component cost of preferred stock (if applicable) for the firm.

(4) Estimate the component cost of common equity using CAPM for the firm.

(5) Compute the firm's weighted average cost of capital (WACC). Discuss your findings.

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Finance Basics: Estimate the before-tax and after-tax component cost of
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