edf40wrjww2CF_PaperMaster:Desc
Weighed Average Cost of Capital Calculation
The first step of my work was to evaluate what the Cost of Debt is. Then, I worked on the cost of Equity. Those two percentages represent how much the company pays for financing its capital. By weighed them I will find what Nike’s Weighed Average Cost of Capital is.
Cost of Debt (Kd)
In order to calculate the Cost of Debt I used the future cash flow calculation method. I found what interest Nike’s has to pay to finance its debt. The shoe company finances its debt with bond which follows those characteristics:
|Coupon Rate |6.75% (Paid semi-annually) |
|Issued |07/15/1996 |
|Maturity |07/15/21 &nb ...