Calculating WACC

Complete the WACC calculations by putting in a lookup formula for the cost of debt. $($See the handout for additional instructions.$)$

$1.$ Unlever Beta

Comparable Levered $\backslash$beta E D$/$V Unlevered $\backslash$beta A

Comp One $1\mathrm{.}250\mathrm{.}340\mathrm{.}83$

Comp Two $1\mathrm{.}660\mathrm{.}401\mathrm{.}00$

AVERAGE $\backslash$beta A $0\mathrm{.}91$

$2.$ Relever Beta

Target D$/$V $0\mathrm{.}70$ Corporate Bonds

Relevered $\backslash$beta E $3\mathrm{.}04$

Rates

$3.$ Cost of Equity AAA $4\mathrm{.}51\%$

AAA$-4\mathrm{.}58\%$

ig $4\mathrm{.}20\%$ AA$+4\mathrm{.}62\%$

Rp $6\mathrm{.}90\%$ AA $4\mathrm{.}66\%$

KE $25\mathrm{.}14\%$ AA$-4\mathrm{.}69\%$

A$+4\mathrm{.}82\%$

$4.$ Cost of Debt A $4\mathrm{.}88\%$

A$-4\mathrm{.}93\%$

Bond rating B BBB$+5\mathrm{.}12\%$

KD BBB $5\mathrm{.}19\%$

BBB$-5\mathrm{.}21\%$

$5.$ WACC $($KW$)$ BB$+5\mathrm{.}44\%$

BB $5\mathrm{.}50\%$

t $42\%$ BB$-5\mathrm{.}59\%$

KW $7\mathrm{.}5\%$ B$+5\mathrm{.}89\%$

B $5\mathrm{.}95\%$

B$-6\mathrm{.}08\%$

CCC $6\mathrm{.}35\%$

CC $6\mathrm{.}69\%$