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Determine the weighted average cost of capital (WACC) Using XRO daily stock price, All Ordinaries index daily closing price and risk-free yield (31/3/2017 - 31/3/2022,
- Determine the weighted average cost of capital (WACC)
- Using XRO daily stock price, All Ordinaries index daily closing price and risk-free yield (31/3/2017 - 31/3/2022, as attached) that are provided in the spreadsheet to estimate CAPM using regression method. Present the graph with the best fitting line and a regression output table in your Excel spreadsheet. Calculate the cost of equity using CAPM. (You can make reference to reliable sources, such as mainstream financial media and reputable institutions, for market risk premium and risk-free rate. These inputs can be as of either now or 31 March 2022.)
- Estimate the cost of debt by dividing the company's "Interest Expense" by the "Long-term Debt" as of 31 March 2022. You may assume this cost of debt applies to this XRO's new investment.
- Calculate theweighted average cost of capital (i.e., note that you should use the closing share price on 31 March 2022 to calculate the equity weight). You can assume the financing of the data centre's capital expenditure is in line with the XRO's current capital structure. The ongoing cash outflows on expenses can be covered by the ongoing cash inflows, and thus no additional financing is required.
- Calculate the NPV for this project.
Use Excel function to work out the NPV for this new project.
Daily stock price is attched
https://docs.google.com/spreadsheets/d/1BXPUt7ByUaVcNrph5SOahxzRpgN29hvv/edit?usp=share_link&ouid=112718093673142203886&rtpof=true&sd=true
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