Midland Energy is a global company, which operates in oil and gas exploration refining and marketing (R&M), and production (E&P) and petrochemicals sectors. The major objective of the financial strategy of midland is to invest in the projects that are valuable, to achieve an optimal structure for the capital, to fund the substation growth and repurchasing of shares that are undervalued. In addition, it is necessary to calculate the cost of capital if midland wants to meet all the objectives.
There is different level of risks for all the divisions of the midland, therefore a single corporate WACC cannot be used for estimations of all type of investment. Theretofore, it is necessary that wacc for different divisions are known to calculate the risk associated with every investment project.
