In your baseline scenario, the expected market risk premium (MRP) is 7% and the government bond yield is 5%. However, you believe the MRP can be as 12% or as low as 5%. You also believe that the government bond yield can range from 2% to 7%. 

Analyze how sensitive the WACC is to your assumptions of the MRP (in increments of 0.5%) and the government bond yield (in increments of 1%).

Answer rating: 100% (QA)

The WACC Weighted Average Cost of Capital is a key input in many financial models and it depends on several factors including the market risk premium ... View the full answer