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    DCF Method, CAPM Method, Investment Projects

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    Please help with determining ratios. The attached spread sheet is FEDEX 3 year financial statements. Trying to figure out the ratios. The one that I figured out is not coming close to what Morning Star: http://financials.morningstar.com/ratios/r.html?t=FDX&region=usa&culture=en-US or MSN Money:http://investing.money.msn.com/investments/key-ratios?symbol=FDX&page=PriceRatios are reporting. Please answer the following questions:

    1. Calculate the cost of each capital component, after-tax cost of debt, cost of preferred, and cost of equity with the DCF Method and CAPM method.

    2. What major factors should the company be aware of as it evaluates possible investment projects in the future?

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    Solution Preview

    Capital Market value (in million $) Weight Cost Income tax rate After tax cost Weighted average cost of capital
    Debt 4,737 9.6% 5.10% 36.24% 3.25% 0.31%
    Preferred ...

    Solution Summary

    The solution for the Fedex Financial analysis calculates the cost of each capital component, after-tax cost of debt, cost of preferred, as well as factors that the company should be aware of.