To assess whether the company should enter in the household products market, the weighted average cost of Procter & Gamble in the capital is calculated. Clorox in the capital cost is also calculated as a check on the P & G estimate. The case highlights the conceptual and mechanical aspects of computing the cost of capital for companies with similar business risk and stable capital structure.
This Darden study. "Hide
by Kenneth Eades Source: Darden School of Business 16 pages. Publication Date: March 1, 1991. Prod. #: UV0604-PDF-ENG
Related Case Solutions & Analyses:
Busang: River of Gold (B)
Bayer AG (B)
Autoliv QB: Proposed Joint Venture
McDonalds Corp.
Kaiser Steel Corp.–1987
Star Cablevision Group (C): Responding to a Credit Market Contraction
Royal Automobile Club Rescue Services Division: Transformation Through Technology
ChemBright Inc.
Panera Bread Company
Fertility Rate In South Korea
