Question
Calculate the WACC for Starbucks (SBUX). Use Yahoo! Finance for the stock's beta and market cap, and find reasonable estimates for the market risk premium
Calculate the WACC for Starbucks (SBUX). Use Yahoo! Finance for the stock's beta and market cap, and find reasonable estimates for the market risk premium and risk-free rate. For each of these, note your source and provide a sentence or two explanation for why it is a reasonable estimate. Use the debt data that is available from the 2018 10-k on EDGAR. Use the estimate of total market value of debt to calculate its weight (ignoring issuance costs/amortization and hedging). Assume a tax rate of 30% in your calculation. Put all of the needed data in Excel, and create a separate sheet in the file for each of your calculations of the costs of (1) debt, (2) equity, and (3) WACC.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started