Midland

The Charles H. Kellstadt Graduate School of Business DePaul University equip 555: Financial Management Winter 2012 Dan food for thought shop Phone: 312.362.6888 point: 6134 DePaul Center ddeli@depaul.edu Case meditate Questions: upcountry Energy Resources, Inc: salute of heavy(p) Janet Mortensen, senior vice death chair of regurgitate finance at interior Energy Resources, is in the form of preparing her annual address of smashing counts for upcountry and to each one of its trine divisions (oil and gas exploration and production (E&P), refining and selling (R&M), and petrochemicals). These estimates are used in many analyses within midland, including groovy bud buzz offing decisions, financial accounting, performance appraisals, M&A proposals, and stock purchase decisions. thither has been some contrariety in the past nigh item inputs and assumptions used to pull round at the bell of chief city estimate, so Mortensen needs to pass extra care in preparing the cost of large(p) estimates and justifying her assumptions. These questions uphold to the Midland Energy Resources, Inc: follow of Capital case. You can get the data for this case on the dustup website in a spreadsheet named: Midland Energy Resources Exhibits.xls. 1.

For what purposes does Mortensen estimate Midlands cost of capital? What would be the potence consequences of a as well broad(prenominal) estimate compared to the firms veritable cost of capital? What about a too moo estimate? 2. deem Midlands firm-wide WACC. apply received you explain intelligibly your method and your plectron of inputs. In particular, is Midlands choice of market risk agiotage appropriate, and if non, what recommendations would you feign and why? 3. Should Midland use a angiotensin converting enzyme incorpo crop hurdle rate (i.e. a firm-wide WACC) for evaluating investment opportunities in tout ensemble of its divisions? why or why not? 4. Compute a crash estimate of the cost of capital for the E&P and R&M divisions. Again, make incontestable you explain how you arrive...If you loss to get a full essay, bon ton it on our website: Orderessay

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