Case

***(All info needed to solve is given, no references are missing. If you don't know how to solve & explain please just move on. Do not copy & paste past work from the internet as the calculations are outdated and the problem should be solved using info starting from October 4, 2022. Thank you!)***

You need to estimate Walt Disney Company's WACC. Your task involves finding relevant data for estimating the WACC.

*Please submit the Excel Spreadsheet (for questions 1 to 7) as instructed below.*

Steps Are:

• 1) Download 10-yr T-Bond Yield (rate) for the last 252 days from today (or the date when Module 6 started) on a spreadsheet and label it as T-Bond-rate
• Calculate theAverage, Standard Deviation, Standard Error, and 95% confidence intervalof 10-yr T-Bond data you have downloaded in step 2 and show the results in spreadsheet T-Bond rate as well as in theAnswersheet by linking the results
• Download Walt Disney stock closing price (Ticker Symbol: DIS) for the from today (or the date when Module 6 started October 4, 2022 ) on a separate sheet and label it asDisney-Equity-Price
• Calculate theAverage, Standard Deviation, Standard Error, and 95% confidence intervalof Walt Disney closing price data you have downloaded in step 3 and show the results in the spreadsheet Disney-Equity-Price as well as in theAnswersheet by linking the results
• Read the most recent Equity Beta of Walt Disney athttps://finance.yahoo.com/ and record it in theAnswersheet along with the date of your recording.
• Read the number of shares of Walt Disney outstanding fromhttps://finance.yahoo.com/ and record it in theAnswersheet. The number of shares is not readily available at yahoo. You may have to do some simple calculations to obtain it.

2. Compute the weights ( with respect to the total asset value) for Disney's equity and debt based on the market value of equity taking the average equity price you calculated above, number of shares outstanding for Disney from above, andDisney's market value of debt of $17,314 Million.

3. Calculate Disney's cost of equity capital using the CAPM, the average risk-free rate which is the 10 yr T-bond rate you calculated in step 2 above, the value of beta recorded in step 5 above, and an averagemarket return of 5%.

4. Calculate the 95% confidence interval of Disney's equity cost of capital using the calculation you made in step 2 above and assuming the value of Beta and average Market Return as before.

5. Assuming that Disney has atax rate of 20% and cost of debt 4.018%, calculate its after-tax debt cost of capital.

6. Calculate Disney's Unlevered and Levered WACC.

7. Calculate Disney's net debt by subtracting itscash value of $4,333 Millionfrom its debt. Recalculate the weights for the WACC using the market value of equity, net debt (=Total Debt -Cash), and cash adjusted asset value. Recalculate Disney's Levered WACC using the weights based on the net debt. How much is change in terms of percentage from its non-cash adjusted Levered value of WACC?