If you were to evaluate divisional costs of capital, how would you go about estimating these costs of capital for ExxonMobil?

If you were to evaluate divisional costs of capital, how would you go about estimating these costs of capital for ExxonMobil?
November 24, 2020 Comments Off on If you were to evaluate divisional costs of capital, how would you go about estimating these costs of capital for ExxonMobil? Uncategorized Assignment-help
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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 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.