Calculate the WACC for Harley Davidson. Explain how data was used to calculate the WACC. (The formula used and the formula with values entered). What are any limiting assumptions made?

Use these bits of information:

Use these bits of information to arrive at the answer:

The 10 year treasury bond rate to use is: 2.18 (this rate came from the U.S. Treasurey site on 11/28)

Outstanding Bond issues can be found here: http://quicktake.morningstar.com/StockNet/bonds.aspx?symbol=HOG

If you scroll toward the bottom, you can see the two outstanding bond issues: 12/15/2014 and 6/15/2018. As noted in the Project 2 instructions, you can use the rate on a non-callable bond as the pre-tax cost of debt.

Beta value: 1.01

Return on Equity = Risk free rate + (Beta score * Market Risk Premium) ROE= 2.18+(1.01*.04) ROE= 2.2204