Cost of Capital Estimation

Please choose one company from the list ATT

Debt Research - ?

Based on their latest 10K, list down the components of their debt structure & the associated interest rate (From Investor Relations webpage) Using a weighted average approach, estimate their average cost of debt Using their average tax rate, estimate after-tax cost of debt Using the balance sheet, estimate the debt portion of the capital structure

Equity Research - ?

• Assume the following: RFR = 2%

  ERP = 7%

• Get your company's beta from Yahoo Finance

• Estimate the cost of Capital using CAPM

  Calculate WACC - ?

  Using the above, calculate the WACC of the company