Beta = 1.2

Required return on debt (yield to maturity on a long term bond) = 4%

Tax rate = 21%

30-year government bond = 3%

Q- Estimate the cost of capital (WACC) for Company Z. and all your assumptions.

Current Capitalization (Millions of USD) Currency USD Share Price $111.41 Shares Out. 1,490.8 Market Capitalization 166,087.4 Cash & Short Term Investments 4,455.0 + Total Debt 20,665.0 Pref. Equity + Total Minority Interest 5,201.0 = Total Enterprise Value (TEV) 187,498.4 Book Value of Common Equity 50,316.0 Pref. Equity + Total Minority Interest 5,201.0 + Total Debt 20,665.0 = Total Capital 76, 182.0