C D E F G H L M N 0 Weighted Average Cost of Capital Scenario Changes this is the excel sheet WACC Cost of Capital Components Expected Return of Risk Free Pre-Tax Market Rate Tax Rate Debt Cost Capital Structure Components Short-Term Long-Term Equity Debt Debt Bond Rating Beta Total Capital Target Disney Six Flags 21.923 0.96 0.89 9.6% 9.6% 2.49% 2.4% 21.8% 24.2% 3.096 4.296 A B+ 248,699 4,190 36,311 2.467 306,933 6.676 7.9% 6.39 19 Fed Rate Move Disney Six Flags 0.96 2.4% 2.496 21.8% 24.2% 3.0% 4.2% A B+ 248,699 4,190 21,923 19 36,311 2,467 306,933 6,676 7.996 6.3% 0.89 9.8% Credit Rating Change Disney Six Flags 3.096 A 21.923 0.96 0.89 9.696 9.8% 2.49% 2.496 21.89 24.2% 248,699 4,190 36,311 2,467 306,933 6,676 7.996 6.3% B+ 19 Additional Debt for Fox Acquisition Disney 0.96 Six Flags 0.89 9.6% 3.0% 2.49% 2.49 21.8% 24.2% A B+ 248,699 4,190 21,923 19 36,311 2.467 306,933 6,676 7.9% 6.3% 9.89 Bear Stock Market Disney Six Flags 0.96 21.896 3.0% A 9.6% 9.6% 2.4% 2.496 248,699 4,190 21,923 19 36,311 2,467 306,933 6,676 7.9% 6.3% 0.89 24.296 B+ Tax Rate Increases Disney Six Flags A 0.98 0.89 9.6% 9.6% 2.4% 2.4% 21.896 24.2% 3.09 4.29 248,699 4,190 21,923 19 36,311 2.467 306,933 6.676 7.99 6.3% B+ In the WACC Sensitivity tab on the accompanying spreadsheet, alter the cells as described below to see how changes to WACC's inputs impact the WACC. Write a few sentences describing each change. O FED RATE INCREASE An increase of the Federal Reserve interest rate by 200 basis points (2.0%) lifts the borrowing costs of every debt issuer. What is Disney's adjusted WACC? O CREDIT RATING CHANGE A downgrade in Disney's credit rating should increase its cost of debt to the same level as Six Flags, all other conditions being equal. What is Disney's adjusted WACC? C D E F G H L M N 0 Weighted Average Cost of Capital Scenario Changes this is the excel sheet WACC Cost of Capital Components Expected Return of Risk Free Pre-Tax Market Rate Tax Rate Debt Cost Capital Structure Components Short-Term Long-Term Equity Debt Debt Bond Rating Beta Total Capital Target Disney Six Flags 21.923 0.96 0.89 9.6% 9.6% 2.49% 2.4% 21.8% 24.2% 3.096 4.296 A B+ 248,699 4,190 36,311 2.467 306,933 6.676 7.9% 6.39 19 Fed Rate Move Disney Six Flags 0.96 2.4% 2.496 21.8% 24.2% 3.0% 4.2% A B+ 248,699 4,190 21,923 19 36,311 2,467 306,933 6,676 7.996 6.3% 0.89 9.8% Credit Rating Change Disney Six Flags 3.096 A 21.923 0.96 0.89 9.696 9.8% 2.49% 2.496 21.89 24.2% 248,699 4,190 36,311 2,467 306,933 6,676 7.996 6.3% B+ 19 Additional Debt for Fox Acquisition Disney 0.96 Six Flags 0.89 9.6% 3.0% 2.49% 2.49 21.8% 24.2% A B+ 248,699 4,190 21,923 19 36,311 2.467 306,933 6,676 7.9% 6.3% 9.89 Bear Stock Market Disney Six Flags 0.96 21.896 3.0% A 9.6% 9.6% 2.4% 2.496 248,699 4,190 21,923 19 36,311 2,467 306,933 6,676 7.9% 6.3% 0.89 24.296 B+ Tax Rate Increases Disney Six Flags A 0.98 0.89 9.6% 9.6% 2.4% 2.4% 21.896 24.2% 3.09 4.29 248,699 4,190 21,923 19 36,311 2.467 306,933 6.676 7.99 6.3% B+ In the WACC Sensitivity tab on the accompanying spreadsheet, alter the cells as described below to see how changes to WACC's inputs impact the WACC. Write a few sentences describing each change. O FED RATE INCREASE An increase of the Federal Reserve interest rate by 200 basis points (2.0%) lifts the borrowing costs of every debt issuer. What is Disney's adjusted WACC? O CREDIT RATING CHANGE A downgrade in Disney's credit rating should increase its cost of debt to the same level as Six Flags, all other conditions being equal. What is Disney's adjusted WACC