Estimates of the weighted average cost of capital

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Reference no: EM131190403

My assignment is to generate estimates of the weighted average cost of capital (WACC) for five different companies picked from different industries: I picked the following: Advertising: Wizard World, Inc. (OTC BB:WIZD); Aerospace/Defense: Sparton Corp., (NYSE:SPA); Air Transport: Hawaiian Holdings Inc. (NASDAQGS:HA); Apparel: Kate Spade & Company (NYSE:KATE); Auto & Truck: Tesia Motors, Inc., (NASDAQ:TLSA). Then to build a three column table displaying the company name and its stock symbol in the column, with a brief description of the comapny and its main line of business in the second column; and the company's WACC estimate in the third column. Then explain the importance and process of calculating the weighted average cost of capital; i.e., Why do firms need to know this value? How is the weighted average cost of capital used to make decisions? What are each of the components of the weighted average cost of capital and how are each of these components estimated? What are some possible reasons for why the WACC's in the table different from one another? Finally, describe the relationship between rise and expected return, as reflected in bond and stock yields.

Reference no: EM131190403

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