In this assignment, you are tasked with estimating the Weighted Average Cost of Capital (WACC) of any non-financial NYSE or NASDAQ listed company of your choice for any year between 2016 and 2020. Annual reports (also termed as 10-K reports) for NYSE and NASDAQ listed companies are readily available on EDGAR, which is the Security and Exchange Commission's (SEC) official search tool. You are free to use whatever sources or data. Please include the annual report of the company-year that you are looking into (example: if you are looking into estimating Apple's WACC for the year 2016, please include a copy of Apple's 2016 annual report). Any excel sheets you used should also be included.

1 Risk-free rate (15 Marks) What would an appropriate proxy for the risk-free rate be in this case? Accordingly, what is the risk-free rate for the fiscal year you are analyzing? Explain how and why obtaining a risk-free rate for the USA is more straightforward than other emerging markets. Illustrate this using a comparative example between the US and any selected emerging market.

2 Cost of Equity financing (30 Marks) Estimate the Beta of your selected company-year. Interpret it. Explain briefly how you estimated the Beta. Explain why the Beta estimate you have obtained may be a flawed estimate of your company's systemic risk. 2 Obtain the unlevered Beta from your levered beta estimate. For the sake of simplicity, assume a tax rate of 35% if the year of analysis is prior to the Tax Cuts and Jobs Act of 2017, or 21% if the year of analysis follows the Tax Cuts and Jobs Act of 2017. Notwithstanding the flaws of relying on your Beta estimate, use the estimated Beta, the appropriate risk-free rate and expected market returns to obtain a cost of equity for your company. Run this using both levered and unlevered Beta.

3 Cost of Debt financing (30 Marks) As a CFO you are tasked with selecting the annual coupon rate on a five-year corporate bond to be sold at par value (a face value of $1,000). A paragraph or two justifying the selected coupon rate, based on reference to existing debt issuance by your chosen company, similar peers, or industry averages, and with reference to the current credit rating of the company and the relevant yields for that investment grade. Estimate the cost of debt using the synthetic rating of your selected company, based on the company's interest coverage ratio. Interest coverage ratios can be mapped to default spreads from Aswath Damadoran's website.

4 Weighted Average Cost of Capital (30 Marks) Calculate the WACC of the company based on the previously estimated costs of debt and equity. For the sake of simplicity, you can rely this time on book values to obtain debt and equity ratios. Assume hypothetically that the USA is faced with uncertainty over future corporate tax policies as a result of hypothetical upcoming presidential elections. The Democratic candidate has promised to increase the corporate tax rate by up to 10% if she wins the presidential elections. The Republican candidate on the other hand has promised to reduce the corporate tax rate by up to 10% if he wins the presidential elections. Run a sensitivity analysis of this tax uncertainty on WACC. Briefly explain the results, comparing between the relative impact of tax increases as compared to tax decreases of similar magnitude. Explain briefly how would you potentially deal with such corporate tax uncertainty in any valuation exercise.