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Midland Energy Resources: Cost of Capital

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Midland Energy Resources, Inc.: Cost of Capital Analysis
TABLE OF CONTENTS
I.

EXECUTIVE SUMMARY ........................................................................................ 2

II. COMPONENT ESTIMATIONS ............................................................................... 2
1. Effective Tax Rate - t ............................................................................................. 2
2. Capital Structure – D/E ......................................................................................... 3
3. Cost of Debt - r" .................................................................................................... 3
Exploration & Production (E&P) ................................................................................ 3
Refining and Marketing (R&M).................................................................................. 4
Petrochemicals ......................................................................................................... 4

4. Cost of Equity -r# ................................................................................................... 4
1) r$ ........................................................................................................................ 4
2) βlevered ............................................................................................................. 4
Exploration & Production (E&P) ................................................................................ 5
Refining and Marketing (R&M).................................................................................. 5
Petrochemicals ......................................................................................................... 5

3) EMRP ................................................................................................................. 6
III. WACC &...

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