Question: Please put it into excel with the formulas WACC MODEL If you have built the model correctly, you will have a WACC of 8.2% given
Please put it into excel with the formulas
WACC MODEL
If you have built the model correctly, you will have a WACC of 8.2% given the following inputs:
- number of bonds issued = 50,000
- principal per bond = $1,000
- coupon rate = 5.0%
- Yield-to-Maturity = 10.0%
- Dividend at year 0 = $3.55
- Dividend Growth rate during years 1-10 = 5.5%
- Dividend terminal growth rate = 2.2%
- Beta of company = 1.2
- Risk-free rate = 3.0%
- Expected market return = 8.5%
- Total shares of stock = 500,000
- Tax rate = 35.0%
NPV MODEL
If you have built the model correctly, you will have a NPV of $488 and IRR of 8.6% given the following inputs:
- Initial investment = $12,500
- % loss of the initial investment from (years 1-5) = -0.5%
- % gain on the initial investment (years 6-14) = 25.3%
- expected return = WACC from WACC model above
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