Question: Dear Tutors, Please help me with this case study. I am having a hard time to deal with the case as shown below. I really
Dear Tutors,
Please help me with this case study. I am having a hard time to deal with the case as shown below.
I really appreciate your help.
You want to calculate the WACC for a public company (your choice). Complete the following steps to construct a spreadsheet that can be updated.
State the company that you chose. Find out the company's ticker symbol, hyperlinks to the web pages that you will need to find all of the information necessary to calculate the cost of equity. Use a market risk premium of seven percent when using CAPM.
Ticker symbol:
Stock quote link
Stock price: $
Dividend: $
Key statistics link
Beta:
Shares outstanding:
Bond center link:
Risk-free rate:
Market risk premium: 7.00%
Market value of equity:
Cost of equity
CAPM:
Create hyperlinks to the FINRA bond quote website and the SEC EDGAR database and find the information for the company's bonds. Create a table that calculates the cost of debt for the company. Assume the tax rate is 35 percent.
(Assume the target capital structure equals to the market value weight)
Maturity YTM "Quoted
Price" Book Value Market Value "Market Value
Weight" Weighted cost of debt
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
Total market value = $- Cost of debt = 0.000%
Tax rate: 35%
Aftertax cost of debt:
Cost of equity:
Market value of equity: $
Aftertax cost of debt:
Market value of debt: $
Finally, calculate the market value weights for debt and equity. What is the WACC for the company?
Weight of debt:
Weight of equity:
WACC:
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