JPMorgans Latin American Equity Research department produced the following WACC calculation for Petrobrs of Brazil versus Lukoil

Question:

JPMorgan’s Latin American Equity Research department produced the following WACC calculation for Petrobrás of Brazil versus Lukoil of Russia in their June 18, 2004 report. Evaluate the methodology and assumptions used in the calculation. Assume a 28% tax rate for both companies.