3. Compute the WACC for Element

Revenues Cost of sales Gross profit SG&A EBIT Interest Other inc (exp) Taxable Inc Taxes Net Income Biogen 2014 2019 20.063 23,362 4,422 4,356 15,641 19,006 9.450 9,332 6.191 9,674 1,071 1,289 Horizon 2014 2019 42.237 46,840 16,768 14.112 25,469 32,728 19,542 21.125 5.927 11,603 466 619 Element 2014 2019 20.247 31.904 9,218 13,231 11.029 18.673 8,430 14,141 2,599 4,532 73 576 Revenues Cost of sales Gross profit SG&A EBIT Interest Other inc (exp) Taxable Inc Taxes Net Income 465 5,585 427 5,158 753 9,138 1,296 7,842 11.822 480 17.283 11,464 5,349 1.687 11,934 9,777 555 3.081 797 2,284 121 4,077 390 3,687 760 N/A N/A 153 N/A N/A Shares O/S Share Price Shares os Share Price Beta Stock Debt rating Depreciation 591 216 1.05 BB 2,206 2.838 2,539 60 85 0.90 BB 6,691 3,652 2,092 1,548 3,014 Depreciation Other Information 10 Year Treasury Bond Yield: 3-Month Treasury Bill: 2.1% 0.25% Moody's Bond Yields AAA AA A BBB BB B CCC 2.50% 2.75% 3.10% 3.75% 4.95% 6.25% 8.50% Balance Sheets for Selected Companies ($ millions) Inventory Accs Rec Other CA Cash Total CA Biogen 2014 2019 2,647 3,584 2,546 4,057 2,494 1,888 27,026 8,911 34,713 18,440 Horizon 2014 2019 5,571 5,978 6,626 6,778 5,257 4,277 15,719 10,450 33,173 27,483 Element 2014 2019 2,643 4,316 Inventory 3,586 5,425 Accs Rec 4,572 1,786 Other CA 4,460 4,140 Cash 15,261 15,667 Total CA NPPE Other FA Total FA 5,223 29,073 34,296 4,928 36,339 41,267 13,136 52,026 65,162 15,053 41,861 56,914 5,935 20,079 26,014 8,038 NPPE 44,182 Other FA 52,220 Total FA Total Assets 69,009 59,707 98,335 84,397 41,275 67,887 Total Assets 500 ST Debt Accs Pay Other CL Total CL 1,212 5,296 7,008 2,953 1,371 8,511 12,835 2,704 2,625 13,437 18,766 3,610 3,738 14,872 22,220 4,437 1,064 5,031 10,532 1,478 ST Debt 3,252 Accs Pay 6,133 Other CL 10,863 Total CL LT Debt Other LT Liab Total LT Liab 30,215 6,008 36,223 26,950 10,249 37,199 18,699 12,079 30,778 22,736 13,440 36,176 3,408 5,696 9,104 16,661 LT Debt 9,062 Other LT Liab 25,723 Total LT Lab Common Eq 25,778 9,673 48,791 26,001 21,639 31,301 Common Eq Total Liab & E 69,009 59,707 98,335 84,397 41,275 67,887 Total Liab & E Revenues Cost of sales Gross profit SG&A EBIT Interest Other inc (exp) Taxable Inc Taxes Net Income Biogen 2014 2019 20.063 23,362 4,422 4,356 15,641 19,006 9.450 9,332 6.191 9,674 1,071 1,289 Horizon 2014 2019 42.237 46,840 16,768 14.112 25,469 32,728 19,542 21.125 5.927 11,603 466 619 Element 2014 2019 20.247 31.904 9,218 13,231 11.029 18.673 8,430 14,141 2,599 4,532 73 576 Revenues Cost of sales Gross profit SG&A EBIT Interest Other inc (exp) Taxable Inc Taxes Net Income 465 5,585 427 5,158 753 9,138 1,296 7,842 11.822 480 17.283 11,464 5,349 1.687 11,934 9,777 555 3.081 797 2,284 121 4,077 390 3,687 760 N/A N/A 153 N/A N/A Shares O/S Share Price Shares os Share Price Beta Stock Debt rating Depreciation 591 216 1.05 BB 2,206 2.838 2,539 60 85 0.90 BB 6,691 3,652 2,092 1,548 3,014 Depreciation Other Information 10 Year Treasury Bond Yield: 3-Month Treasury Bill: 2.1% 0.25% Moody's Bond Yields AAA AA A BBB BB B CCC 2.50% 2.75% 3.10% 3.75% 4.95% 6.25% 8.50% Balance Sheets for Selected Companies ($ millions) Inventory Accs Rec Other CA Cash Total CA Biogen 2014 2019 2,647 3,584 2,546 4,057 2,494 1,888 27,026 8,911 34,713 18,440 Horizon 2014 2019 5,571 5,978 6,626 6,778 5,257 4,277 15,719 10,450 33,173 27,483 Element 2014 2019 2,643 4,316 Inventory 3,586 5,425 Accs Rec 4,572 1,786 Other CA 4,460 4,140 Cash 15,261 15,667 Total CA NPPE Other FA Total FA 5,223 29,073 34,296 4,928 36,339 41,267 13,136 52,026 65,162 15,053 41,861 56,914 5,935 20,079 26,014 8,038 NPPE 44,182 Other FA 52,220 Total FA Total Assets 69,009 59,707 98,335 84,397 41,275 67,887 Total Assets 500 ST Debt Accs Pay Other CL Total CL 1,212 5,296 7,008 2,953 1,371 8,511 12,835 2,704 2,625 13,437 18,766 3,610 3,738 14,872 22,220 4,437 1,064 5,031 10,532 1,478 ST Debt 3,252 Accs Pay 6,133 Other CL 10,863 Total CL LT Debt Other LT Liab Total LT Liab 30,215 6,008 36,223 26,950 10,249 37,199 18,699 12,079 30,778 22,736 13,440 36,176 3,408 5,696 9,104 16,661 LT Debt 9,062 Other LT Liab 25,723 Total LT Lab Common Eq 25,778 9,673 48,791 26,001 21,639 31,301 Common Eq Total Liab & E 69,009 59,707 98,335 84,397 41,275 67,887 Total Liab & E