f-620-make-factsheet

Review the Harvard Business School Case (Brief Case) – #4130, dated June 19, 2009 ( See Attached )

Consider the following in your analysis:

The main goal for this case is for Janet Mortensen to append a sort of â€œuser guideâ€ in her 2007 calculations;
If she did append a â€œuserâ€™s guideâ€ what might be her guidance for different types of project analysis at Midland such as capital budgeting and financial accounting, performance assessments, M&A proposals, and stock repurchase decisions;
how might the cost of capital numbers differ or guidance differ for division- level versus corporate-level decisions;
what guidance might she provide with validating the components used to compute the WACC;
how would you compute a cost of capital for the Petrochemical division;
what â€˜actualâ€™ firm would you use now as a pure play for the Petrochemical division.

Note:

1- pages must be more than 1 page and less than 4 pages

2- Grading on Fact Sheet:

Overview and Assumptions
- Appropriateness of T-bond maturity used
- Appropriateness of equity risk premium used
- Appropriateness of using firm-level WACC for divisions
- Approach to defining division-level cost of capital
Computation of firm-level WACC
Computation of division-level cost of capital
Approach used to compute cost of capital for PetroChemical Division
User Guide Reccomendation – capital project valuation, asset projects, performance evaluation
Format and Content
- standard 1″ margins
- single-spacing (text)
- double-spacing between paragraphs
- no paragraph indentation (left justified)
- size 12 font, Times New Roman, black text
- italicized or bold font for section headings