Using the Case Study Notes and the accompanying spreadsheet, calculate the WACC of each segment comparable. Describe the primary WACC drivers that explain the differences between the WACC of your company and its comparable.

In the WACC Sensitivity tab on the accompanying spreadsheet, alter the cells described below to see how changes to WACC's inputs impact the WACC. Write a few sentences describing each change.

Fed rate increase: An increase of the Federal Reserve interest rate by 200 basis points (2.0%) lifts every debt issuer's borrowing costs. What is your company's adjusted WACC?

Credit rating change: A downgrade in your company's credit rating should increase its debt cost to the same level as the closest peer, all other conditions being equal. What is your company's adjusted WACC?

U.S. equity market downturn: Equity market expectations may cool, resulting in an expectation that equity markets may only expand by 200 basis points (2.0%) over the coming year. What is your company's adjusted WACC?

Increased marginal tax rate: The tax rate cut has ended. A new administration is in power. Assume your company's marginal tax rate rises to 30.0%. What is your company's adjusted WACC?

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