We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Case Tottenham Hotspur

essay
The whole doc is available only for registered users

A limited time offer! Get a custom sample essay written according to your requirements urgent 3h delivery guaranteed

Order Now

1a) Change in NWC = cash requirements + inventory + receivables – payables. There will be no cash requirements, because of the hint in the question excess cash should not be included so therefore change in NWC will be 1,17 + 19,99 – 64,40 = -43,24 for the year 2007. For the next years until 2020 will use the revenue growth as a measurement to calculate the NWC for the next years. The revenue growth is 9 percent per year so the NWC will grow by 9 percent per year. FCF = (Revenue – Costs – Depreciation) x (1 – tax rate) + Depreciation – Capital Expenditure – change in working capital. So when I fill in this formula I get: 71,1 – 69,1 – 2,2 x (1 – 0,35) + 2,2 – 2,26 – -43,24 = 45,79. See for the next years the last page of this document. 1b) that is because most of the football clubs won’t have a large sum of accounts receivables and have a small inventories.

“Normal organizations” will have much higher accounts receivables and much bigger inventories. 1c) E(R) = RFR + βstock (Rmarket – RFR) according the case the risk free rate is 4,57% and the beta is 1,29 and the market risk premium will is given in the question 4,57% + 1,29 x 5% = 11,02 % is the expected return on equity. 1d) Cost of debt can be calculated by dividing the interest expense / amount of equity x 100%. So if we put in the numbers we get the following: (2,26/ 45,73) x 100 = 4,94%. For calculating the weighted average cost of capital after tax we use the following formula:

WACC = (45,73/153,2) x 11,02% + (107,48/153,2) x 4,94% x (1 – 0,35) = 2,58%

Related Topics

We can write a custom essay

According to Your Specific Requirements

Order an essay
icon
300+
Materials Daily
icon
100,000+ Subjects
2000+ Topics
icon
Free Plagiarism
Checker
icon
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access
immediately?

Your Answer Is Very Helpful For Us
Thank You A Lot!

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59