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Assumptions: As you recall, the formula for WACC is: rWACC = (E/E+D) rE + D/(E+D) rD (1-TC) The formula for the required return on a

Assumptions:

As you recall, the formula for WACC is:

rWACC = (E/E+D) rE + D/(E+D) rD (1-TC)

The formula for the required return on a given equity investment is:

ri= rf + i * (RMkt-rf)

RMkt-rf is the Market Risk Premium. For this project, you may assume the Market Risk Premium is 5% unless you can develop a better number.

rf is the risk-free rate. The risk-free rate is normally the yield on US Treasury securities such as a 10-year treasury. For this assignment, please use 3.5%.

You may assume a corporate tax rate of 40%.

Please do the following a r

report that contains the following elements:

Your calculated WACC

How data was used to calculate WACC (provide the formula and the formula with your values substituted)

Sources for your data

A discussion of how much confidence you have in your answer, including what the limiting assumptions you made were, if any

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