Discussion Questions
- Outline the importance of the cost of capital in a company. How is the estimate of the cost of capital used in Domino’s Pizza Enterprises Ltd?
- Using various outlined approaches, estimate the cost of debt for Domino’s Pizza Enterprises Ltd as of December 2023.
- Using various outlined approaches, estimate the cost of equity for Domino’s Pizza Enterprises Ltd as of December 2023.
- What is your recommended cost of capital for Domino’s Pizza Enterprises Ltd as of December 2023?
- If Domino’s plans to acquire new stores in China, would it be appropriate for Domino’s to use the cost of capital recommended in Part 4 as a discount rate in the capital budgeting evaluation. Why or why not?
