HON is the Honeywell International. The tutor must include all the tabels that he used to do the calculations. Just include them at the end of the paper and he should prefer to them in side the text when answering the questions
You work for Roger Qian, who is the VP of the hedge fund that hired you out of WSU. He is looking to invest in a company. and wants you to calculate its cost of capital. You should address the following tasks and questions in a memo to Mr. Qian. Your memo should be double-spaced and no longer than 4 pages. To support your conclusions in the memo, you should attach supplemental information (in the form of appendices) to the memo. You can have unlimited attachments to your memo as long as each appendix is referenced within the memo; however, the memo should be self-contained and completely answer all the questions and issues below.
The company you must analyze depends on the last digit of your WSU ID number.
|
Last digit of WSU ID number
|
Ticker Symbol of company
|
|
0 or 1
|
SWF
|
|
2 or 3
|
|
|
4 or 5
|
HON
|
|
6 or 7
|
|
|
8 or 9
|
OW:
|
1. Provide a brief overview of the company. What does it do?
2. What is the cost of debt for the firm? Be sure to state and justify any assumptions that you make in computing this value. (You can search for information about the individual bond issues of the firm at bun:• cxa.marketwatch.com BonklCent er Dethult.aspx.
Search for the bond issues using the ticker symbol of the firm, and click on each issue for information on each bond issue.)
3. What is the cost of equity for the firm? Describe each input needed to compute the cost of equity (be specific!). and state how and why you chose these inputs. And state and justify any assumptions that you make in computing this value.
4. What is the weighted average cost of capital for the firm? Clearly indicate the data that you used to calculate this value. Be sure to state and justify any assumptions that you make in computing this value.
5. What is the firm's asset beta? Use the asset beta in the CAPM formula to get an "unlevered" cost of capital (i.e. the cost of capital if the firm had no debt in its capital structure.) State and justify any assumptions that you make in arriving at this value. How does the unlevered cost of capital compare to the WACC of the firm?