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:

$1.$ SEC$$s Edgar database $$ 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 Fiserv$$s stock, H is CRSP value$-$weighted index, J is S&P $500$ index returns$).$

$3.$ FINRA$$s TRACE database $$ for public bond yields and prices

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

$5.$ Yahoo$$s finance web$-$site or NASDAQ.com $$ 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 alPERMNO Names Date CUSIP Ticker Symbol Company Name Returns Shares Outstanding Value$-$Weighted Return$-$incl. dividends Equal$-$Weighted Return$-$incl. dividends Return on the S&P $500$ Index

to calculate Weighted Average Cost of Capital $($WACC$)$ for Fiserv.

PERMNO Names Date CUSIP Ticker Symbol Company Name Returns Shares Outstanding Value$-$Weighted Return$-$incl. dividends Equal$-$Weighted Return$-$incl. dividends Return on the S&P $500$ Index

$106961/31/201933773810$FISV FISERV INC $0\mathrm{.}1284528823925000\mathrm{.}088293910\mathrm{.}12026030\mathrm{.}0786844$

$106962/28/201933773810$FISV FISERV INC $0\mathrm{.}0212227443915870\mathrm{.}032724210\mathrm{.}038571650\mathrm{.}02972893$

$106963/29/201933773810$FISV FISERV INC $0\mathrm{.}0423898473923000\mathrm{.}01296229-0\mathrm{.}0039077920\mathrm{.}01792429$

$106964/30/201933773810$FISV FISERV INC $-0\mathrm{.}0117807083924400\mathrm{.}037893270\mathrm{.}020354650\mathrm{.}03931344$

$106965/31/201933773810$FISV FISERV INC $-0\mathrm{.}0158184392440-0\mathrm{.}06167856-0\mathrm{.}06457144-0\mathrm{.}06577773$

$106966/28/201933773810$FISV FISERV INC $0\mathrm{.}0617284293929000\mathrm{.}067278860\mathrm{.}049001820\mathrm{.}06893019$

$106967/31/201933773810$FISV FISERV INC $0\mathrm{.}1565379056796860\mathrm{.}01185439-0\mathrm{.}005244870\mathrm{.}01312819$

$106968/30/201933773810$FISV FISERV INC $0\mathrm{.}014322319679686-0\mathrm{.}02033936-0\mathrm{.}04000117-0\mathrm{.}01809165$

$106969/30/201933773810$FISV FISERV INC $-0\mathrm{.}0313260336808000\mathrm{.}016033040\mathrm{.}01768070\mathrm{.}01718117$

$1069610/31/201933773810$FISV FISERV INC $0\mathrm{.}0246163076798950\mathrm{.}019257090\mathrm{.}0062907860\mathrm{.}02043175$

$1069611/29/201933773810$FISV FISERV INC $0\mathrm{.}0951573256798950\mathrm{.}034999010\mathrm{.}026600810\mathrm{.}03404706$

$1069612/31/201933773810$FISV FISERV INC $-0\mathrm{.}0052477686799000\mathrm{.}028488780\mathrm{.}044379330\mathrm{.}0285898$

$106961/31/202033773810$FISV FISERV INC $0\mathrm{.}025771888679900-0\mathrm{.}001727854-0\mathrm{.}01333364-0\mathrm{.}00162809$

$106962/28/202033773810$FISV FISERV INC $-0\mathrm{.}07798668682142-0\mathrm{.}07791799-0\mathrm{.}06981447-0\mathrm{.}08411047$

$106963/31/202033773810$FISV FISERV INC $-0\mathrm{.}131400898674000-0\mathrm{.}1417327-0\mathrm{.}2075027-0\mathrm{.}1251193$

$106964/30/202033773810$FISV FISERV INC $0\mathrm{.}0849563116694840\mathrm{.}12967380\mathrm{.}15386750\mathrm{.}1268441$

$106965/29/202033773810$FISV FISERV INC $0\mathrm{.}0359984416694840\mathrm{.}053738750\mathrm{.}06406950\mathrm{.}04528178$

$106966/30/202033773810$FISV FISERV INC $-0\mathrm{.}0856981726694000\mathrm{.}025299090\mathrm{.}0573910\mathrm{.}0183884$

$106967/31/202033773810$FISV FISERV INC $0\mathrm{.}0222290336696500\mathrm{.}055531490\mathrm{.}040736520\mathrm{.}0551013$

$106968/31/202033773810$FISV FISERV INC