Assignment 1: Discussion—Analyzing Cost of Capital

With the assistance of Sensible Essentials, the operations management team now understands the cost implications associated with providing adequate funds to implement the organization’s growth plan. The team has concluded that the plans would be financed using both debt and equity. Sensible Essentials offered to provide Genesis a set of guidelines and models that might help determine the appropriate mix of debt and equity financing. You are the client manager of Sensible Essentials. Using the module readings, Argosy University online library resources, and the Internet, research cost of capital for Genesis. Then respond with the following: A written set of guidelines for analyzing Genesis’s cost of capital. Be sure to touch on three topics: WACC, MCC, and leverage. Write your initial response in 4–5 paragraphs. Apply APA standards to citation of sources. By Thursday, April 5, 2012, post your response to the appropriate Discussion Area. Through Monday, April 9, 2012, review and comment on at least two peers’ responses. In your response, do the following: Respond with substantial comments to enrich discussion and the learning experience. Contribute new, relevant information or quotes from course readings, Web sites, or other sources. Build on the remarks or questions of others, or share practical examples of key concepts from your experience, professional or personal. Assignment 1 Grading Criteria Maximum Points Prepared a set of guidelines for analyzing Genesis’s cost of capital. 16 Applied the concepts of WACC, MCC, and leverage in analyzing Genesis’s cost of capital. 8 Actively contributed to the discussion by providing points of view with supporting rationale, by challenging points of the discussion, or by drawing relationships between points of the discussion. 8 Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation. 8 Total: 40