In early 2022 Meta Platforms had $14.5 billion in debt, total equity capitalization of $600 billion, and an equity beta of 1.38 (as reported on Yahoo! Finance). Included in Meta’s assets was $48 billion in cash and risk-free securities. Assume Meta’s debt beta is close to zero, the risk-free rate of interest is 3% and the market risk premium is 4%.

a. What is Meta’s enterprise value?

b. Estimate the beta of Meta’s business assets.

c. Estimate Meta’s WACC in a perfect market without taxes.

Appendix