# Finance Management

| October 3, 2018

MS Word Doc : After completing the required calculations, explain your results in a Word document, and attach the spreadsheet showing your work. Be sure to explain the following:How would you expect the weighted average cost of capital (WACC) to differ if you had used market values of equity rather than the book value of equity, and why?What would you expect would happen to the cost of equity if you had to raise it by selling new equity, and why?If the after-tax cost of debt is always less expensive than equity, why don’t firms use more debt and less equity?What are some of the advantages and disadvantages of raising capital by using debt?How would “floatation costs” impacted the WACC, and how could they have been incorporated in the formula?Note: You can find information about the top 500 stocks at this Web site.ReferenceS&P 500 index chart. (2014). Retrieved from the Yahoo! Finance Web site: http://finance.yahoo.com/echarts?s=%5egspc+interactive#symbol=^gspc;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;Be sure to document your paper with in-text citations, credible sources, and list of references used in proper APA format.Excel spreadsheet : Using the most current annual financial statements from the company your choice toanalyze, determine the percentage of the firm’s assets that are currently be financed with debt (total liabilities), preferred stock, and common stock (common equity). It is very possible that your firm will have very little or no preferred stock, so in this class, the percent would be “zero.” Your ratios should add up to 100%. You will also need to calculate the firmâ€™s average tax rate using the income tax expense divided by the firm’s income before taxes. Show for all works done in Excel in the excel spreadsheet do not delete work shown for. Use percentages when needed.

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