I need at least a 90% for this project, so be sure you can complete it well*

I need at least a 90% for this project, so be sure you can complete it well*

The OCS project requires you to determine the optimum capital structure for Johnson and Johnson.
This is a small continuation of a project that I have already done and attached below with its Excel file for calculations.

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Project:

This assignment follows your previous WACC project. Here, you must determine what the optimum capital structure is for your firm. A sample spreadsheet is provided where you may input the data that you have already found for the WACC. The spreadsheet will use Hamada’s Equation to recalculate the levered betas based on the weights that you choose.

NOTE: You cannot just assume that your weights and your bond values are the same as the sample. You must choose the appropriate weights first based on the market value weights your firm currently has. Then, you must choose appropriate bond rates as you increase or decrease the weight for debt.

You must explain and reference how you chose your numbers and attach a copy of the spreadsheet.

Note that the spreadsheet has all the calculations for the WACC on the top portion, but Hamada’s Equation only uses the CAPM to refigure the levered beta and the new WACC for that beta.

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Attached files:

1. instructions for the OCS assignment and review the instructions.

2. “Sample Combination WACC and OCS Spread Sheet.

3. Figure 15-5 (tell me if you need the whole book)

4. Previous Project files

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Complete the OCS project according to the assignment instructions. For example:

1. Complete a table similar to Figure 15-5 in the textbook.

2. Use the “Sample Combination WACC and OCS Spread Sheet” as a model.

3. Your table will likely not be identical since it depends on what your capital structure is now.

4. What was the existing capital structure for your firm? Do you believe it was optimum?

5. Use Hamada’s equation to determine the optimum.

6. Should your company take on more debt, repurchase stock, or have a seasoned equity offering? Justify your answers

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Submission:

1. Excel with all the calculations and table

2. Project document with all the written parts and Excel numbers (Similar to Previous Project)