analyze the:

- Cost of Equity

- Cost of Debt

- Cost of Capital

2Book vs Market Value of the company. Does $Rl rely on debt?

3. Internal vs External Equity and Debt Due

4. Financing choices - Talk about the advantages and disadvantages of debt.

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Estimation of Current Cost of Capital Inputs Company Number of Shares outstanding = Current Market Price per share = Levered beta (or regression beta) Unlevered beta = Riskfree Rate = Ralph Lauren Corp 65.60 $138.09 1.4744 check this against Yahoo 1.3129 3.79% 5.32% Equity Risk Premium used in cost of equity = Debt Pre-tax Cost of Debt = Default Spread + Risk-free Rate Tax Rate = Tax Expense/Pre-tax Income (or 20%) 5.05% 24.5% Debt value of operating leases $ 1,450.32 Preferred Stock Number of Preferred Shares Authorized = N/A look this up in 10K Number of Preferred Shares Outstanding = 65.60 Current Market Price per Share= 138.78 check gurufocus.com for market price Annual Dividend per Share = 3 Output Estimating Market Value of Straight Debt (or Book Value) Value of Debt in Operating leases = Levered Beta for equity = Market Value Weight in Cost of Capital Cost of Component 1.49 $ $ 676,845 1,450 75.58 Equity Debt Preferred Stock $ 9,059 $ 1.30% 678,295 $ 97.39% Capital 9,104 $696,458 7.81% 3.82% 1.31% 100.00% 2.16% 3.85% WACC Estimation of Current Cost of Capital Inputs Company Number of Shares outstanding = Current Market Price per share = Levered beta (or regression beta) Unlevered beta = Riskfree Rate = Ralph Lauren Corp 65.60 $138.09 1.4744 check this against Yahoo 1.3129 3.79% 5.32% Equity Risk Premium used in cost of equity = Debt Pre-tax Cost of Debt = Default Spread + Risk-free Rate Tax Rate = Tax Expense/Pre-tax Income (or 20%) 5.05% 24.5% Debt value of operating leases $ 1,450.32 Preferred Stock Number of Preferred Shares Authorized = N/A look this up in 10K Number of Preferred Shares Outstanding = 65.60 Current Market Price per Share= 138.78 check gurufocus.com for market price Annual Dividend per Share = 3 Output Estimating Market Value of Straight Debt (or Book Value) Value of Debt in Operating leases = Levered Beta for equity = Market Value Weight in Cost of Capital Cost of Component 1.49 $ $ 676,845 1,450 75.58 Equity Debt Preferred Stock $ 9,059 $ 1.30% 678,295 $ 97.39% Capital 9,104 $696,458 7.81% 3.82% 1.31% 100.00% 2.16% 3.85% WACC