Estimate the most current Weighted Average Cost of Capital of Fiserv Inc $($ticker: FI$).$ Use CAPM to estimate the cost of equity. Assume that the capital structure $($the market debt$-$to$-$equity ratio$)$ observed as of the most recent annual financial statements remains in place forever for the company. Also assume that the market risk premium is $5\%$ and that the marginal tax rate is $21\%.$ Suggested sources of the data: $1.$ SECs Edgar database for financial statements and annual or quarterly report $(10-$K or $10-$Q$)$

$2.$ Stock returns from CRSP database to calculate the beta $($an Excel file with the data is available on CANVAS. Column B is the date of the end of the observation month, F is monthly returns on Fiservs stock, H is CRSP value$-$weighted index, J is S&P $500$ index returns$).$

$3.$ FINRAs TRACE database for public bond yields and prices

$4.$ U$.$S$.$ Treasurys web$-$site for T$-$bond rates

$5.$ Yahoos finance web$-$site or NASDAQ.com for the stock price around the date of the most recent financial report.

Recipe:

a$)$ Calculate the cost of debt using most recent yields from a representative set of Fiserv public bonds.

b$)$ Calculate the market value of Fiserv debt using book value of debt adjusted by the price to face value multiple of a set of public bonds of Fiserv.

c$)$ The marginal tax rate is provided.

d$)$ Calculate the market value of equity using number of shares outstanding from the most recent financial report and historical stock price as of that date from NASDAQ or Yahoo.

e$)$ Calculate the cost of equity using CAPM. For that, you are provided the market risk premium. Use current yield on the $10-$year Treasury bond as the risk$-$free rate, and calculate the beta of Fiserv stock using $5$ years of monthly stock returns and VW CRSP portfolio as the market portfolio. Data on stock returns are provided in the Excel file using CRSP database.

f$)$ Combine it all to calculate Weighted Average Cost of Capital $($WACC$)$ for Fiserv.