Subject category:
Finance, Accounting and Control
Published by:
Darden Business Publishing
Version: 03.2004
Length: 10 pages
Data source: Published sources
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Abstract
This case asks the student to compute Procter & Gamble''s weighted-average cost of capital to determine whether another company should enter the household-products market; the student must also compute Clorox''s cost of capital 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
This case asks the student to compute Procter & Gamble''s weighted-average cost of capital to determine whether another company should enter the household-products market; the student must also compute Clorox''s cost of capital 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.