Church & Dwight (CHD): Optimal Capital Structure and Cost of Capital Sensitivity Analysis

Zhuohang Ying

Co-Presenters: Individual Presentation

College: College of Business and Public Management

Major: BS.FINANCE

Faculty Research Mentor: Kakolyris, Andreas  

Abstract:

Title: Church & Dwight (CHD): An Illustration of the Cost of Capital SensitivitiesAbstract: This example examines optimal capital structure choice by simulating the weighted average cost of capital. We explore how leveraged beta affects Church & Dwight (CHD)’s market value and its optimal capital structure. Using Bloomberg Terminal inputs, CHD’s current levered beta is 0.329, which is used to evaluate how equity risk and the cost of capital change under alternative leverage scenarios. Our model utilizes the synthetic rating method to investigate capital sensitivities of hypothetical leverage levels. Capital structure and its impact on a firm’s cost of capital and value remains widely debated and is closely related to strategic financing and restructuring decisions. Our findings are presented and analyzed in this poster.