Subject category:
Finance, Accounting and Control
Published by:
Darden Business Publishing
Version: 03.1991
Length: 16 pages
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Abstract
To assess whether a company should enter the household-products market, Procter and Gamble''s weighted-average cost of capital is computed. Clorox''s cost of capital is also computed as a check on the P&G estimate. The case emphasizes the conceptual as well as mechanical aspects of computing cost of capital for a company with homogeneous business risk and stable capital structure.
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Abstract
To assess whether a company should enter the household-products market, Procter and Gamble''s weighted-average cost of capital is computed. Clorox''s cost of capital is also computed as a check on the P&G estimate. The case emphasizes the conceptual as well as mechanical aspects of computing cost of capital for a company with homogeneous business risk and stable capital structure.