Two managers attending an executive education course effort to develop a cost of capital estimate for a leading telecommunications company. Both managers are confused about the costs of the calculation of the total corporate cost of capital, various sources of capital, and the proper use of the hurdle rate.
They must investigate the theory of cost of capital, review historical data on risk premiums, develop a process for estimating the various elements of the cost of capital, and establish the corporate cost of capital.
Publication Date: 02/12/2002
This is just an excerpt. This case is about Finance
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