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2. To estimate the cost of equity for TSLA, go to finance.yahoo.com Q and enter the ticker symbol TSLA. Follow the links to answer the
2. To estimate the cost of equity for TSLA, go to finance.yahoo.com Q and enter the ticker symbol TSLA. Follow the links to answer the following questions: What is the most recent stock price listed for TSLA? What is the market value of equity, or market capitalization? How many shares of stock does TSLA have outstanding? What is the most recent annual dividend? Can you use the dividend discount model in this case? What is the beta for TSLA? Now go back to finance.yahoo.com Q and follow the Bonds link. What is the yield on three-month Treasury bills? Using the historical market risk premium, what is the cost of equity for TSLA using CAPM? 3. You now need to calculate the cost of debt for TSLA. Go to finra-markets.morningstar.com@, enter TSLA as the company, and find the yield to maturity for each of TSLA's bonds. What is the weighted average cost of debt for TSLA using the book value weights and using the market value weights? Does it make a difference in this case if you use book value weights or market value weights? 4. You now have all the necessary information to calculate the weighted average cost of capital for TSLA. Calculate this using book value weights and market value weights, assuming TSLA has a 21 percent tax rate. Which number is more relevant? 5. You used TSLA as a pure play company to estimate the cost of capital for SMI. Are there any potential problems with this approach in this situation
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