Weighted Average Cost of Capital

Use the data below to estimate the weighted average cost of capital (WACC). You will estimate the cost of equity as an average of the cost equity results obtained from the CAPM approach and from the DCF approach as discussed in class.P0 = 150, rRF = 3%, g = 2%, D0 = \$13, t = 35%, ws = 60%, wd = 40%, rd = 7%, rM = 9%, b = 1.45 considering that P0 is the cutrent price of the stock, rRF is the risk free, g is the dividend growth rate, D0 is the last dividend paid, t is the corporate tax rate on income, ws is the ratio of equity to the total capital structure, wd is the weight of debt in the capital structure, rd is the nominal rate of debt, rM the return on the S&P500, and b is the stock beta.2) Use the result from above question and the value from the table below to compute the following:1. The Intrinsic Value of the Firm (Present value of the cash flows) (Use WACC as the discount rate)2. The Value of equity assuming that the value of debt is \$6,049.933. The price per share if the company has 150 shares outstanding4. Compare the price per share you from your result to P0 of question 14. Is the stock currently overvalued or undervalued assuming your work in question 15 is accurate?Years12345FCF1,5002,500-5001,5002,000Terminal Value           30,994Total1,5002,500-5001,50032,994

Don't use plagiarized sources. Get Your Custom Essay on
Weighted Average Cost of Capital
From \$8/Page
Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 20% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Top Writers 4Me
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 10k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Microbiology
Thank you so much! I appreciate what you do and all of the great help you've given me!
Customer 452483, September 6th, 2021
English 101
na
Customer 452547, March 22nd, 2022
Introduction to Sociology
Amazing! Thank you so much for your hard work, appreciate it!!
Customer 452483, October 24th, 2021
Education
Great good
Customer 452555, February 14th, 2022
Communications
Thank you so much!
Customer 452461, June 23rd, 2021
Mathematics
PERFECT! Thanks a million, you're all awesome!!!!
Customer 452483, July 7th, 2021
Psychology
On point! Appreciate all the hard work!!
Customer 452483, August 16th, 2021
Nursing
Excellent! Thank you.
Customer 452487, October 16th, 2021
Other
I appreciate the help.
Customer 452567, March 18th, 2022
Sociology
Perfect! Appreciate all of your help! Thank you so much!
Customer 452483, November 14th, 2021
Psychology
Thank you so much for all of your hard work & help! It’s perfect! Appreciate it!!
Customer 452483, September 11th, 2021
English 101
Thank you guys for always being there and helping me always get a 100% on my assignments!
Customer 452483, August 16th, 2021
1159
Customer reviews in total
96%
Current satisfaction rate
2 pages
Average paper length
47%
Customers referred by a friend