Calculate the weighted average cost of capital

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Reference no: EM131216926

Reqiurements:

1. Calculate the weighted average cost of capital (WACC) for Qantas.

2. For the year ended June 2016 Qantas paid more than $500m to buy back shares. Explain possible reasons for Qantas to follow such a course of action?

source 1. https://www.qantasnewsroom.com.au/media-releases/qantas-group-full-year-result-2016/

Highlights

- Record underlying profit before tax: $1.53 billion, up 57%

- Record statutory profit before tax: $1.42 billion, up 80%

- Record results for Qantas Domestic, Qantas International, Jetstar Group, Qantas Loyalty

- Near-doubling of earnings per share: 49c, up 24c

- Return on invested capital: 23%, up 6.5 points

- Operating cash flow: $2.8 billion, up 38%

- Net free cash flow: $1.7 billion

- $500m shareholder return: fully-franked 7c per share ordinary dividend and on market share buy-back

- Additional cash bonus totalling $75 million for 25,000 non-executive employees

- Continued investment in aircraft cabins and wi-fi

source 2

https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/full-year-results/preliminaryFinalReport16.pdf

source 3.

https://www.qantas.com.au/infodetail/about/investors/2015AnnualReport.pdf

Reference style. harvard (3 reference)

Reference no: EM131216926

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