Calculate the weighted average cost of capital
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Collect the following data for the company assigned to you:
eta (use the current beta available at Marketwatch.com)
tock price and number of shares outstanding
nterest-bearing debt from the last yearàbalance sheet
axes and taxable income from the last yearàincome statement (tax rate = taxes/taxable
income)
10-year Treasury yield
ind the companyàbond rating from S&P NetAdvantage and then find the current
market yield for the bond rating.
o If the bond rating is not available or it is below BBB, calculate the cost of debt by
dividing the interest expense from the last yearàincome statement by total interestbearing debt from the last yearàbalance sheet (this is the least preferred method)
Calculate the weighted average cost of capital of the company. For the cost of equity, use a 6%
market risk premium.
Note
ubmit this homework to Canvas before the next class starts. No late submission is
accepted.
Homework 2
Company Name?ADM
https://www.marketwatch.com/investing/stock/adm?mod=search_symbol
Collect the following data for the company assigned to you:
eta (use the current beta available at Marketwatch.com)
tock price and number of shares outstanding
nterest-bearing debt from the last yearàbalance sheet
axes and taxable income from the last yearàincome statement (tax rate = taxes/taxable
income)
10-year Treasury yield
ind the companyàbond rating from S&P NetAdvantage and then find the current
market yield for the bond rating.
o If the bond rating is not available or it is below BBB, calculate the cost of debt by
dividing the interest expense from the last yearàincome statement by total interestbearing debt from the last yearàbalance sheet (this is the least preferred method)
Calculate the weighted average cost of capital of the company. For the cost of equity, use a 6%
market risk premium.
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