Star Appliance Company (B): January 1985
17 Pages Posted: 21 Oct 2008
In the B case, students must estimate the cost of capital for this recently leveraged company and use it to decide between two investment alternatives. Case data allow the use of a wide variety of debt and equity marginal-cost methods. The case appendix provides several ways to estimate the market returns for the capital-asset-pricing model, including analysts' forecasts. See also the A case (UVA-F-0421).
Keywords: capital asset pricing model, capital investment, cost of capital
Suggested Citation: Suggested Citation