Determining the Debt-Equity Mix

Introduction El Café, an extremely popular coffee shop in Nicollett Mall, Minneapolis, Minnesota is going through a period of many challenges. The intent of this paper is to identify the scenario(s), explain recommended solutions and summarize the different capital structure concepts addressed in the simulation by answering the two questions: why is WACC important to an organization and what impact does WACC have on capital budgeting and structure? The Scenario and the …

…used as the discount rate applied to future cash flows for deriving a business's net present value. Discounted cash flow tries to work out the value of a company today, based on projections of how much money it's going to make in the future. References: Brealey, R., Myers, S., & Marcus, A. (2004). Fundamentals of Corporate Finance, 4th ed. New York: McGraw-Hill/Irwin. Retrieved August 6, 2006 from website https://ecampus.phoenix.edu/secure/resource/resource.asp.