WACC

Assignment 2: Final Project

Introduction

The weighted cost of capital is in FedEx Corporation is calculated on basis of estimation of cost of capital; consolidated balance sheet for year 2010 has been used (FedEx Annual Report 2010).

Discussion

For the consolidated balance sheet, the following figures have been used: (FedEx Annual Report, 2010)

for Long term debt we have taken 1 year Municipal Bonds return rate

WACC

 

 

4.20%

WACC as A Discount Rate For Capital Budgeting Analysis

It is not appropriate to use WACC as a discount rate as the application of low rates could inflate the discounted value of future cash flows, which results in choosing an inefficient ...