Beta 0 9 Required return on debt (yield to maturity on a long term bond) 3 2 Tax rate 21 30 year government bond 2 1 Market risk premium can be assumed to be 5 Current Capitalization (Millions of USD) Currency Million USD Shares Price $ 36 7 Shares Outstanding 78 9 Market Capitalization 2,895 6 Cash Short Term Investments 29 0 Total Debt 625 0 Pref Equity Total Minority Interest Total Enterprise Value (TEV) 3,491 6 Book Value of Common Equity 457 0 Pref Equity Total Minority Interest Total Debt 625 0 Total book capital 1,082 0 Estimate the cost of capital (WACC) What does the excel formula look like and what variables does it draw from

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Question: - Beta = 0.9 - Required return on debt (yield to maturity on a long term bond) = 3.2% - Tax rate = 21% -

- Beta = 0.9 - Required return on debt (yield to maturity on a long term bond) = 3.2% - Tax rate = 21% - 30-year government bond = 2.1% - Market risk premium can be assumed to be 5%

Current Capitalization (Millions of USD)
Currency	Million USD
Shares Price	$ 36.7
Shares Outstanding	78.9

Market Capitalization	2,895.6
- Cash & Short Term Investments	29.0
+ Total Debt	625.0
+ Pref. Equity	-
+ Total Minority Interest	-
=Total Enterprise Value (TEV)	3,491.6

Book Value of Common Equity	457.0
+ Pref. Equity	-
+ Total Minority Interest	-
+ Total Debt	625.0
Total book capital	1,082.0

Estimate the cost of capital (WACC)

What does the excel formula look like and what variables does it draw from?

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