Cargill is generally considered to be the largest privately held company in the world. Headquartered in Minneapolis, Minnesota, the company has been averaging sales of over $113 billion per year over the past 5 year period. Although the company does not have publicly traded shares, it is still extremely important for it to calculate its weighted average cost of capital properly in order to make rational decisions on new investment proposals.
Assuming a risk-free rate of 4.50%, an effective tax rate of 48%, and a market risk premium of 5.50%, estimate the weighted average cost of capital first for companies A and B, and then make a guestimate of what you believe a comparable WACC would be for Cargill.
		Company A		Company B		Cargill
Company Sales		$10.5 billion		$45 billion		$113 billion
Company's beta		0.83		0.68		??
Credit Rating		AA		A		AA
Weighted average cost of debt		6.885%		7.125%		6.820%
Debt to total capital		34%		41%		28%
International sales/Sales		11%		34%		54%