In a 1,000 words Microsoft Word document in APA (6.0) format, respond to the MINI-CASE: Petrobrás of Brazil and the Cost of Capital on page(s) 409-412 in the course textbook.
You must include at least three outside references (in addition to the textbook).
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Why Petrobra’s Cost of Capital Is High and Better Ways of Calculating WACC
According to analysts, there are various reasons as to why the oil and gas company reported very high cost of capital despite the many measures established to ensure that it survives in the competitive market. The company was set up in 1954 by the government of Brazil as the main shareholder with a singular objective of ensuring that the country reduces its dependency on imported oil. The main undoing of the company was however the lack of diversification which caused its cost of capital to be very uncompetitive (Du & Schreger, 2016). By being not international, it lacked the attraction of many international investors. The lack of diversification in the international…
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