Subject category:
Finance, Accounting and Control
Published by:
IBS Case Development Center
Length: 8 pages
Data source: Generalised experience
Abstract
The case study has been written primarily to bring out one of the core concepts in finance - Weighted Average Cost of Capital (WACC). Though there are many methods to calculate the cost of capital, WACC is widely used and is popular. The case study focuses on a discussion on WACC between a professor and his students. It further explains the importance of cost of capital and capital mix. It will help the learners to understand the intricacies involved in WACC calculations using the example of Target Corporation - one of the largest retail chain stores in the United States. The case will help the students to: 1) Analyse the relevance of cost of capital and use of WACC in its calculation; 2) Understand how to calculate WACC with real time data and bring out the difference between theory and practice; 3) Understand the limitations of WACC; 4) Examine the different available alternatives to calculate cost of capital. The case is meant for MBA/MS level students as part of a corporate finance/ security analysis curriculum. The teaching note does not have an analysis of the case.
Subject category:
Finance, Accounting and Control
Published by:
IBS Case Development Center
Length: 12 pages
Data source: Generalised experience
About
Abstract
The case study has been written primarily to bring out one of the core concepts in finance - Weighted Average Cost of Capital (WACC). Though there are many methods to calculate the cost of capital, WACC is widely used and is popular. The case study focuses on a discussion on WACC between a professor and his students. It further explains the importance of cost of capital and capital mix. It will help the learners to understand the intricacies involved in WACC calculations using the example of Target Corporation - one of the largest retail chain stores in the United States. The case will help the students to: 1) Analyse the relevance of cost of capital and use of WACC in its calculation; 2) Understand how to calculate WACC with real time data and bring out the difference between theory and practice; 3) Understand the limitations of WACC; 4) Examine the different available alternatives to calculate cost of capital. The case is meant for MBA/MS level students as part of a corporate finance/ security analysis curriculum. The teaching note does not have an analysis of the case.
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Subject category:
Finance, Accounting and Control
Published by:
IBS Case Development Center
Length: 12 pages
Data source: Generalised experience