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Calculate the Cost of Equity (Ka) for both Coke and Pepsi as of the end of 2000 using each of the following 3 methods: Calculate
Calculate the Cost of Equity (Ka) for both Coke and Pepsi as of the end of 2000 using each of the following 3 methods: Calculate Ka using the capital asset pricing model (CAPM) Calculate K, using the dividend discount model (DDM) Calculate K. using the earnings capitalization model (ECM) Of the3 methods above, which do you feel n most appropriate? Calculate the Weighted Average Cost of Capital (WACC) for both Coke and Pepsi as of the end of 2000 using book values of debt and equity Calculate the Weighted Average Cost of Capital (WACC) for both Coke and Pepsi as of the end of 2000 using market values of debt and equity Of the two calculations above in (C) and (0), which do you feel is most appropriate? interpret the results of your WACC calculation. What observations can you make, if any? Do a logic check; do the numbers make sense? Why or why not
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