How would compute cost of capital for petrochemical division

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Business Case Assignment

Assignment:

Review the Harvard Business School Case (Brief Case)- Midland Energy Resources, Inc.: Cost of Capital Timothy A Luehrman joel L. Heilprin

Consider the following in your analysis:

- The main goal for this case is for Janet Mortensen to append a sort of "user guide" in her 2007 calculations;

- 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;

- How might the cost of capital numbers differ or guidance differ for division-level versus corporate-level decisions;

- What guidance might she provide with validating the components used to compute the WACC;

- How would you compute a cost of capital for the Petrochemical division;

- What ‘actual' firm would you use now as a pure play for the Petrochemical division.

Reference no: EM131482157

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