Last Updated 07 Jul 2020

# Computation and Analysis of the Weighted Average Cost of Capital of the Limited Brands, Inc.

Category Capital, Investment, Money
Essay type Analysis
Words 234 (1 page)
Views 11

The Limited Brands, Inc. (the Company) is the known parent company of gigantic stores that cater to women such as Victoria’s Secret, Victoria’s Secret Pink, La Senza, Bath and Body Works, C. O. Bigelow, White Barn Candle Co. and Henri Bendel. It has reported sales of \$9,043,000,000 in 2008 and employs more than 90,000 associates throghout the USA alone. The company has reached international markets through its Bath and Body Works and La Senza outlets.

This paper will analyse the capital structure of the Limited Brands, Inc. and how it relates to such components of capital affect the firm’s profitability and growth in today’s economy. The Weighted Average Cost Overview The weighted average cost of capital (WACC) is the cost a company must pay the holders of its debt and equity to finance the assets. Computing the WACC of the Company will first require a computation of the company’s total equity, yield to maturity of debts, cost of equity and the firm’s tax rate.

One of the many variations of the formula for WACC is: [Rd x D/V x (1-5)] + [Re x E/V] Where Rd = Bond's yield to Maturity (I/Y in Calculator) D = Market Value (Present Value) of Bonds (1 - t) = 1 - tax rate = Interest tax shield deductibility of interest expense Re = Shareholder's return requirement V = Total value of all capital (Debt + Equity) (www. financescholar. com, n. d. )

Order custom essay Computation and Analysis of the Weighted Average Cost of Capital of the Limited Brands, Inc. with free plagiarism report

GET ORIGINAL PAPER

This essay was written by a fellow student. You can use it as an example when writing your own essay or use it as a source, but you need cite it.

## Get professional help and free up your time for more important courses

Starting from 3 hours delivery 450+ experts on 30 subjects
get essay help 124  experts online

Did you know that we have over 70,000 essays on 3,000 topics in our database?

Explore how the human body functions as one unit in harmony in order to life

Computation and Analysis of the Weighted Average Cost of Capital of the Limited Brands, Inc.. (2018, Feb 07). Retrieved from https://phdessay.com/computation-and-analysis-of-the-weighted-average-cost-of-capital-of-the-limited-brands-inc/