Question

Once again, your team is the key financial management team for your company. The company’s CEO is now looking to expand its operations by investing in new property, plant, and equipment. In order to effectively evaluate the project’s effectiveness, you have been asked to determine the firm’s weighted average cost of capital. To determine the cost of capital, here is what you have been asked to do.

1. Go to Yahoo Finance (http://finance.yahoo.com) and capture the income statement information for the company you selected. (Be sure that your company has debt on their balance sheet. This will be required in your project.)

a. Enter your company’s name or ticker symbol. Your company’s information should appear.

b. Click on the Financials tab, and select the income statement option. Three years’ worth of income statements should appear. Copy and paste this data into a spreadsheet.

c. Repeat step b. above for the balance sheets of the company.

d. Click on “Historical Prices.” Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above.

URGENT: NEED ANSWER ASAP

PLEASE RESPOND WITH COPY AND PASTE, NOT ATTACHMENT USE ORIGINAL CONTENT NOT USED BEFORE ON CHEGG

PLEASE ANSWER THROUGHLY TO ALL ANSWER TO BEST ABILITES ORIGINAL SOURCE NEVER USED BEFORE!!!

Answer 1

J. C. Penney Company
Income Statement
Particulars	01-02-14	31-01-15	30-01-16
(All Amounts are in Thousands)
Total Revenue	11,859,000	12,257,000	12,625,000
Cost of Revenue	8,367,000	7,996,000	8,074,000
Gross Profit	3,492,000	4,261,000	4,551,000
Operating Expenses
Research Development	-	-	-
Selling General and Administrative	3,918,000	3,797,000	3,940,000
Non Recurring	215,000	87,000	84,000
Others	601,000	631,000	616,000
Total Operating Expenses	-	-	-
Operating Income or Loss	-1,242,000	-254,000	-89,000
Income from Continuing Operations
Total Other Income/Expenses Net	-114,000	-34,000	-10,000
Earnings Before Interest and Taxes	-1,356,000	-288,000	-99,000
Interest Expense	352,000	406,000	405,000
Income Before Tax	-1,708,000	-694,000	-504,000
Income Tax Expense	-430,000	23,000	9,000
Minority Interest	-	-	-
Net Income From Continuing Ops	-1,392,000	-751,000	-523,000
Non-recurring Events
Discontinued Operations	-	-	-
Extraordinary Items	-	-	-
Effect Of Accounting Changes	-	-	-
Other Items	-	-	-
Net Income	-1,278,000	-717,000	-513,000
Preferred Stock And Other Adjustments	-	-	-
Net Income Applicable To Common Shares	-1,278,000	-717,000	-513,000

J. C. Penney Company
Balance Sheet
Period Ending	01-02-14	31-01-15	30-01-16
(All Amounts are in Thousands)
Current Assets
Cash And Cash Equivalents	113,000	119,000	119,000
Short Term Investments	1,402,000	1,199,000	781,000
Net Receivables	193,000	172,000	231,000
Inventory	2,935,000	2,652,000	2,721,000
Other Current Assets	190,000	189,000	166,000
Total Current Assets	4,833,000	4,331,000	4,018,000
Long Term Investments	-	-	-
Property Plant and Equipment	5,619,000	5,148,000	4,816,000
Goodwill	-	-	-
Intangible Assets	-	-	-
Accumulated Amortization	-	-	-
Other Assets	1,349,000	830,000	608,000
Deferred Long Term Asset Charges	-	-	-
Total Assets	11,801,000	10,309,000	9,442,000
Current Liabilities
Accounts Payable	2,146,000	2,100,000	2,285,000
Short/Current Long Term Debt	700,000	56,000	127,000
Other Current Liabilities	-	-	-
Total Current Liabilities	2,846,000	2,156,000	2,412,000
Long Term Debt	4,901,000	5,265,000	4,668,000
Other Liabilities	632,000	611,000	618,000
Deferred Long Term Liability Charges	335,000	363,000	425,000
Minority Interest	-	-	-
Negative Goodwill	-	-	-
Total Liabilities	8,714,000	8,395,000	8,133,000
Stockholders' Equity
Misc. Stocks Options Warrants	-	-	-
Redeemable Preferred Stock	-	-	-
Preferred Stock	-	-	-
Common Stock	152,000	152,000	153,000
Retained Earnings	-1,008,000	-2,494,000	-3,007,000
Treasury Stock	-	-	-
Capital Surplus	4,571,000	4,606,000	4,654,000
Other Stockholder Equity	-628,000	-350,000	-491,000
Total Stockholder Equity	3,087,000	1,914,000	1,309,000
Net Tangible Assets	3,087,000	1,914,000	1,309,000

Name	Outstanding Amount (Mil)	Par Value	Number Bonds	Coupon Rate (%)	Current Market Price	YTM (%)	Outstanding Market Value (Mill)	Weight	Weighted YTM (%)
5.65% Senior Notes Due 2020	400.00	100.00	4000000	5.650%	100.00	5.65%	400.00	8.28%	0.47%
5.75% Senior Notes Due 2018	300.00	100.00	3000000	5.750%	100.00	5.75%	300.00	6.21%	0.36%
6.375% Senior Notes Due 2036	400.00	100.00	4000000	6.375%	100.00	6.38%	400.00	8.28%	0.53%
6.9% Notes Due 2026	2.00	100.00	20000	6.900%	100.00	6.90%	2.00	0.04%	0.00%
7.125% Debentures Due 2023	10.00	100.00	100000	7.125%	100.00	7.13%	10.00	0.21%	0.01%
7.4% Debentures Due 2037	326.00	100.00	3260000	7.400%	100.00	7.40%	326.00	6.75%	0.50%
7.625% Notes Due 2097	500.00	100.00	5000000	7.625%	100.00	7.63%	500.00	10.35%	0.79%
7.65% Debentures Due 2016	78.00	100.00	780000	7.650%	100.00	7.65%	78.00	1.61%	0.12%
7.95% Debentures Due 2017	220.00	100.00	2200000	7.950%	100.00	7.95%	220.00	4.55%	0.36%
8.125% Senior Notes Due 2019	400.00	100.00	4000000	8.125%	100.00	8.13%	400.00	8.28%	0.67%
2013 Term Loan Facility	2,194.00			4.750%		4.75%	2194.00	45.42%	2.16%
	4,830.00						4830.00	100.00%	5.98%

Market Return			8.14%
Risk Free Rate			2.45%
Market Risk Premium			5.69%
Beta (As per Yahoo Finance)			0.86
Equity Risk Premium			4.89%
Cost of Equity			7.34%

WACC Calculation of J.C. Penny
Sources of Funds		Market Value (in Million)	Weight	Cost of Fund	Tax Rate	After Tax Cost of Fund	Weighted Average Cost
Equity		2282.01	32.83%	7.34%		7.34%	2.41%
Debt		4668.00	67.17%	5.98%	35.00%	3.88%	2.61%
WACC							5.02%
									Market Value of Debt
									Total Debt (In million)	4,830.00
									Less: Unamortized debt issuance costs (In Million)	61.00
									Less: Current Maturities (In million)	101.00
									Total long-term debt (In million)	4668.00
									Market Value of Equity
									Per Share Value at Reporting Date	7.46
									Share Outstanding at Reporting Date	305.90
									Total Value of Equity (In million)	2282.01