SESSION 1&2: INTRODUCTION TO VALUATION, ESTIMATING A FIRM’S COST

OF CAPITAL, AND ESTIMATING REQUIRED RATES OF RETURN FOR PROJECTS

(2 problems will be assigned to 2 parts of the class)
Problem: Pearson Electronics - Projected WACC using Corporate Financing (Chap 5 –
Valuation, Titman)

*Important Note:
- Students are required to prepare the answer for question (a) at home
- For question (b) you will discuss in-class with your group and present the result in front of the
class. This question will be assigned to 2 groups. Hence, one group will present and the other
give comments on that presentation.
Problem: Lampkin Manufacturing Company - Projected WACC using Corporate
Financing (Chap 5 –Valuation, Titman)