Task ${?}^{W2}$

Your Asignment: Once you have selected your comparable firms, the next task is to create an Excel model the calculates the CAPM and WACC for Rosetta stone. We discussed how to do this in Week $6,$ so refence those slides for guidance, especially this one which will help with the process.

Some of the information you'll need is found in the comparable firm exhibit that your referenced in response to Task $$1.$ Note the reference to 'Equity Betas' in the above screen shot. For this assignment, assume that the betas shown in the case are Equity Betas.

A wide variety of cther things needed to complete your calculation of the CAPM cost of equity and the WACC can be found scattered throughout the case. We discovered in class during Week $6$ when we reviewed the slide shown here.

As we observed in our Week $6$ conversation, finance case writers love to bury information in odd places in cases. Information is often hidden in plain sight and some of it may not give you a precise answer, so some judgement is allowed on your part. The only thing that is prohibited is going outside the case material for any statistical assistance.

I would recommend first assembling all the inputs you need and place them in a space at the top of your WACC sheet $($an 'Assumption' box$)$ and then, a few rows down, build the CAPM calculation followed by a your WACC calculation. Both of those should be set up to draw from the assumption box at the top of the page so$,$ if anything changes, there is a flow$-$through recalculation. Finally, it may be helpful to have a separate tab that first calculates information you can extract for your selected comparable firms.