We can work on Wide cost of capital for analyzing capital expenditures

EXXONMOBIL
ExxonMobil ( XOM) is one of the half- dozen major oil companies in the world. The firm has four primary operating divisions ( upstream, downstream,chemical, and global services) as well as a number of operating companies that it has acquired over the years. A recent major acquisition was XTO Energy, which was acquired in 2009 for $ 41 billion. The XTO acquisition gave ExxonMobil a significant presence in the development of domestic unconventional natural gas resources, includ-ing the development of shale gas formations, which was booming at the time. Assume that you have just been hired to be an analyst working for ExxonMobil’s chief financial officer. Your first assignment was to look into the proper cost of capital for use in making corporate investments across the company’s many business units.
a. Would you recommend that ExxonMobil use a single company- wide cost of capital for analyzing capital expenditures in all its business units? Why or why not?
b. If you were to evaluate divisional costs of capital, how would you go about estimating these costs of capital for ExxonMobil? Discuss how you would approach the problem in terms of how you would evaluate the weights to use for various sources of capital as well as how you would estimate the costs of individual sources of capital for each division.

Sample Solution

at times supplanted by a quick n-bit convey spread viper. A n by n exhibit multiplier requires n2 AND doors, n half adders, and n2 , 2n full adders. The Variable Correction Truncated Multiplication technique gives a proficient strategy to re-ducing the power dissemination and equipment necessities of adjusted exhibit multipliers. With this strategy, the diagonals that produce the t = n , k least critical item pieces are disposed of. To make up for this, the AND doors that create the halfway items for section t , 1 are utilized as contributions to the changed adders in segment t. Since the k excess changed full adders on the right-hand-side of the cluster don’t have to create item bits, they are supplanted by adjusted decreased full adders (RFAs), which produce a convey, yet don’t deliver a total. To add the consistent that revises for adjusting mistake, k , 1 of the MHAs in the second column of the exhibit are changed to altered concentrated half adders (SHAs). SHAs are identical to MFAs that have an informat>

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at times supplanted by a quick n-bit convey spread viper. A n by n exhibit multiplier requires n2 AND doors, n half adders, and n2 , 2n full adders. The Variable Correction Truncated Multiplication technique gives a proficient strategy to re-ducing the power dissemination and equipment necessities of adjusted exhibit multipliers. With this strategy, the diagonals that produce the t = n , k least critical item pieces are disposed of. To make up for this, the AND doors that create the halfway items for section t , 1 are utilized as contributions to the changed adders in segment t. Since the k excess changed full adders on the right-hand-side of the cluster don’t have to create item bits, they are supplanted by adjusted decreased full adders (RFAs), which produce a convey, yet don’t deliver a total. To add the consistent that revises for adjusting mistake, k , 1 of the MHAs in the second column of the exhibit are changed to altered concentrated half adders (SHAs). SHAs are identical to MFAs that have an informat>

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