Excel Activity: Calculating the WACC Here is the condensed $2021$ balance sheet for Skye Computer Company Excel Activity: Calculating the WACC

Here is the condensed $2021$ balance sheet for Skye Computer Company $($in thousands of dollars$)$:

free rate is $7\%,$ and Skye's beta is $1\mathrm{.}302.$ The firm's total debt, which is the sum of the company's short$-$term debt and long$-$term debt, equals $$1\mathrm{.}15$ million.

Download spreadsheet Calculating the WACC$-54$de$9$c$.$ris:

After$-$tan cost of debt:

Cost of preferred stock:

Cost of retained earnings

Cost of new common stock:

b$.$ Now calculate the cost of common equity from retained earnings, using the CAPM method.

$14\mathrm{.}81\%$

c$.$ What is the cost of new common stock based on the CAPM? $($Hint: Find the difference between $r_e$ and $r_z$ as determined by the DCF method, and add that differential to the CAPM ualue for $r_z)$

$\%$

determine the weights. Also, use the simple average of the required values obtained under the two methods in calculating Wacc.$)$

$WAC{C}_1$

$WAC{C}_2($in thousands of dollars$)$: of the company's short$-$term debt and long$-$term debt, equals $ $0\mathrm{.}95$ million. places.WACC$\_1$ : $\%$ WACC $\_2$ : $\%$