Brooke Norwood
Managerial Finance
Dr. Rodriguez
27 September 2015
Randolph Corporation Case Study
The Randolph Corporation is a producer of multiple types of sanders such as electric,
sandpapers, industrial grinders and sharpeners as well as coated ceramic, that also has a real
estate division. Compared to their competition, The Randolph Corporation’s stock performed
below expectations. The factors believing to be the issue are the financial planning and the risk
consideration. The Vice President’s assistant suggest that the firm use a target capital structure of
45% debt in every division and differentiating the hurdle rate by the risk of the project.
The WACCs for each division were found in order to calculate the hurdle rate for each
