Assignment: Cost of Capital and Risk in Corporate Finance
Part A
Choose a public company, and present findings from your financial analysis in a report. Your report must include the following:
o Give a description of the operating profit margin.
o Give a description of the asset turnover.
o Give a description of the equity multiplier.
o Give a description of the return on equity.
o Give a description of the return on assets.
o Calculate the operating profit margin. Explain your answer.
o Calculate the asset turnover. Explain your answer.
o Calculate the equity multiplier. Explain your answer.
o Calculate the return on assets. Explain your answer.
o Calculate the return on equity. Explain your answer.
o What does the DuPont analysis describe about the company chosen?
o Which ratio demonstrates the company's weakest area? Explain your answer.
Part B
Using the same company from Part I, write a report of 800-1,000 words that demonstrates your understanding of the cost of capital and risk. Specifically, you are to include the following:
o Give a description of the weighted average cost of capital.
o Give a description of the capital asset pricing model.
o Give a description of the security market line.
o Give a description of the cost of debt.
o Calculate the weighted average cost of capital. Explain your answer.
o Calculate the cost of debt. Explain your answer.
o How would you restructure the firm's debt? Explain your answer.
Format your assignment according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.