1. Calculate the WACC of Dracula Enterprises from the following information using both the CAPM model and Discounted Cash flow Method. The tax rate is 28 %.

• The company has issued 5-year AA rated debt of $ 400,000 which is trading at a discount of 7 %.
• The company has issued 70,000 shares with a par value of $ 10 and have been issued one before.
• The book value of the equity is 700,000
• The shares are trading at a value of $ 43 per share.
• Given the interest rate component information below, determine the yield on a 5-year, A-rated bond.
• Risk free rate 5.9%
• Inflation premium 4.5%
• 5-year Maturity Risk Premium 2.0%
• 1-year Maturity Risk Premium 1.25 %
• AA Default Risk Premium 0.6%
• A Default Risk Premium 1.3%
• The return on the market was 10 % for the year
• The beta of Dracula Enterprises is 1.43
• The recent dividend paid by the company was $ 3.00 and the next year dividend will be $ 3.5