Estimate the weighted average cost of capital (WACC) for Microsoft, Campbell Soup and Merck. Assume their before-tax costs of debt are (in the same order): 2.2%, 3%, and 2.5%.

1.) Compute the market value of equity using the average of prices of the last year in your sample downloaded from finance.yahoo.com in your Module 2 assignment, multiplied by the number of share outstanding which you can find in finance.yahoo.com Key Statistics section.

2.) Compute the Net Debt using the latest balance sheet numbers you find on the SEC EDGAR website as you did in Module 1 assignment.

3.) Compute the equity weight E% and debt weight D% .

4.) Use the 5-year period monthly stock return data you collected and calculated in Module 2 assignment and linear regression to estimate the betas of these three stocks.

5.) Calculate the WACC for these three firms.

This is the data collected for this project for number 4.(below picture)

This is the data from project two.(below picture)

MRK Intercept X Variable 1 Beta: 0.42 Coefficient: Standard Erret Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% 0.010089 0.00631908 1.596591417 0.1158866 0.0025648 0.0227427 -0.0025648 0.0227427 0.420446 0.15919477 2.641081697 0.0106458 0.10166437 0.7392284 0.10166437 0.7392284 CPB Coefficient: Standard Et Stat P-value Lower 95% Upper 95% Lower 95.0 Upper 95.0% Intercept 0.00566 0.006206 0.911896 0.365664272 -0,006768529 0.018088 -0.006769 0.018087737 x Variable: 0.350603 0.156356 2.242333 0.028846597 0.037504896 0.663702 0.037505 0.663701586 Beta: 0.35 MSFT Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95,0% Upper 95.0% Intercept 0.001427 0.006670099 0.213957197 0.831343965 -0.011929528 0.014783759 -0.011929528 0.014783759 xvariable 1.000189 0.168037872 5.952162409 1.72256E-07 0.663698672 1.336678743 0.663698672 1.336678743 Beta: 1.00 0 0 e 9 NO MRK Intercept X Variable 1 Beta: 0.42 Coefficient: Standard Erret Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% 0.010089 0.00631908 1.596591417 0.1158866 0.0025648 0.0227427 -0.0025648 0.0227427 0.420446 0.15919477 2.641081697 0.0106458 0.10166437 0.7392284 0.10166437 0.7392284 CPB Coefficient: Standard Et Stat P-value Lower 95% Upper 95% Lower 95.0 Upper 95.0% Intercept 0.00566 0.006206 0.911896 0.365664272 -0,006768529 0.018088 -0.006769 0.018087737 x Variable: 0.350603 0.156356 2.242333 0.028846597 0.037504896 0.663702 0.037505 0.663701586 Beta: 0.35 MSFT Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95,0% Upper 95.0% Intercept 0.001427 0.006670099 0.213957197 0.831343965 -0.011929528 0.014783759 -0.011929528 0.014783759 xvariable 1.000189 0.168037872 5.952162409 1.72256E-07 0.663698672 1.336678743 0.663698672 1.336678743 Beta: 1.00 0 0 e 9 NO