With electricity companies around the world, AES Corporation seeking methodology for calculating the cost of capital for various businesses and potential projects. In the past, AES uses the same cost of capital for all of its capital budget, but also the international expansion of the company has raised questions about this approach, and whether one takes into account the cost of capital adequately the various risks faced by AES in its various businesses and a variety of environments.
Recently, the company suffered heavy losses from the devaluation of currencies in South America and regulatory changes in other countries. Director of corporate planning group to develop a methodology taking into account the various countries and the risks of the project, and it gives students the opportunity to use this technique to calculate the cost of capital for 15 different projects around the world. Students must consider how the global firm can explain the different risks in the evaluation of its international operations and investments abroad. For an executable tables (courses), please contact our customer service department at order@thecasesolutions.com. "Hide
by Mihir A. Desai, Doug Schillinger Source: HBS Premier Case Collection 23 pages. Publication Date: December 12, 2003. Prod. #: 204109-PDF-ENG
Related Case Solutions & Analyses:
Viterra
Reed–YPEC Negotiation: YPEC (B)
Electronic Medical Records System Implementation at Stanford Hospital and Clinics
Farmington Industries Inc.: Managing Currency Exposure Risk
Burma Pipeline
Six Sigma at Academic Medical Hospital (A)
Operations Strategy at Galanz
Pfizer’s Centers for Therapeutic Innovation (CTI)
Dental Associates of Northern Virginia (B)
Mercedes-Benz India
