Students must evaluate the weighted average cost of capital (WACC) for the two business segments and to allow the dispute to the company in connection with the use of a single rate hurdle compared to the risk-adjusted rate of barrier performance evaluation system. In January 1996, the CFO should Phon-Tech Fashion recommendations for use by betting segment obstacle. Phon-Tech was the purpose of an active investor, who claimed that one segment was not paying its way. The case serves as part of the introduction to evaluate the rate of return required by investors (ROR). It would have been better after one or two sessions of classes estimation techniques WACC. Although the numerical calculations needed light, some details about the use of risk-adjusted rates of obstacles will take time for the beginner to absorb.
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by Robert F. Bruner Source: Darden School of Business 14 pages. Publication Date: November 12, 1996. Prod. #: UV0080-PDF-ENG
