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Here are all the data In the WACC Sensitivity tab on the accompanying spreadsheet, alter the cells as described below to see how changes to

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Here are all the data

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In the WACC Sensitivity tab on the accompanying spreadsheet, alter the cells as described below to see how changes to WACC's inputs impact the WACC. Write a few sentences describing each change. O FED RATE INCREASE An increase of the Federal Reserve interest rate by 200 basis points (2.0%) lifts the borrowing costs of every debt issuer. What Disney's adjusted WACC? O CREDIT RATING CHANGE A downgrade in Disney's credit rating should increase its cost of debt to the same level as Six Flags, all other conditions bei equal. What is Disney's adjusted WACC? Scenario Changes WACC Cost of Capital Components Expected Return Risk Free Pre-Tax of Market Rate Tax Rate Debt Cost Bond Rating Capital Structure Components Short-Term Long-Term Total Equity Debt Capital Beta Debt Target Disney Six Flags 0.96 0.89 9.6% 9.6% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% A B+ 248,699 4,190 21.923 19 36,311 2,467 306,933 6,676 7.9% 6.3% Fed Rate Move Disney Six Flags 248,699 0.96 0.89 9.6% 9.6% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% . B+ 21,923 19 36,311 2,467 306,933 6,676 7.9% 6.3% 4,190 Credit Rating Change Disney 0.96 Six Flags 0.89 248,699 9.6% 9.6% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% . B+ 21,923 19 36,311 2,467 306,933 6,676 7.9% 6.3% 4,190 Additional Debt for Fox Acquisition Disney 0.96 9.6% 0.89 9.6% 248,699 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% . B+ 21,923 19 36,311 2,467 Six Flags 306,933 6,676 7.9% 6.3% 4,190 Bear Stock Market Disney 0.96 Six Flags 0.89 9.6% 9.6% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% A B+ 248,699 4,190 21,923 19 36,311 2,467 306,933 6,676 7.9% 6.3% Tax Rate Increases Disney 0.96 Six Flags 0.89 9.6% 7.9% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% A B+ 248,699 4,190 21,923 19 36,311 2,467 306,933 6,676 9.6% 6.3% WAAC ELEMENTS OF DISNEY Q2 2019 ALL DATA Metric Beta Expected Return of the Market Risk Free Rate Tax Rate Pre-Tax Cost of Debt Value 0.88 9.64% 2.41% 21.83% 2.99% Metric Equity Preferred Equity Short-Term Debt Long-Term Debt Total Capital Value 197,744 0 19,158 37,803 254,705 In the WACC Sensitivity tab on the accompanying spreadsheet, alter the cells as described below to see how changes to WACC's inputs impact the WACC. Write a few sentences describing each change. O FED RATE INCREASE An increase of the Federal Reserve interest rate by 200 basis points (2.0%) lifts the borrowing costs of every debt issuer. What Disney's adjusted WACC? O CREDIT RATING CHANGE A downgrade in Disney's credit rating should increase its cost of debt to the same level as Six Flags, all other conditions bei equal. What is Disney's adjusted WACC? Scenario Changes WACC Cost of Capital Components Expected Return Risk Free Pre-Tax of Market Rate Tax Rate Debt Cost Bond Rating Capital Structure Components Short-Term Long-Term Total Equity Debt Capital Beta Debt Target Disney Six Flags 0.96 0.89 9.6% 9.6% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% A B+ 248,699 4,190 21.923 19 36,311 2,467 306,933 6,676 7.9% 6.3% Fed Rate Move Disney Six Flags 248,699 0.96 0.89 9.6% 9.6% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% . B+ 21,923 19 36,311 2,467 306,933 6,676 7.9% 6.3% 4,190 Credit Rating Change Disney 0.96 Six Flags 0.89 248,699 9.6% 9.6% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% . B+ 21,923 19 36,311 2,467 306,933 6,676 7.9% 6.3% 4,190 Additional Debt for Fox Acquisition Disney 0.96 9.6% 0.89 9.6% 248,699 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% . B+ 21,923 19 36,311 2,467 Six Flags 306,933 6,676 7.9% 6.3% 4,190 Bear Stock Market Disney 0.96 Six Flags 0.89 9.6% 9.6% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% A B+ 248,699 4,190 21,923 19 36,311 2,467 306,933 6,676 7.9% 6.3% Tax Rate Increases Disney 0.96 Six Flags 0.89 9.6% 7.9% 2.4% 2.4% 21.8% 24.2% 3.0% 4.2% A B+ 248,699 4,190 21,923 19 36,311 2,467 306,933 6,676 9.6% 6.3% WAAC ELEMENTS OF DISNEY Q2 2019 ALL DATA Metric Beta Expected Return of the Market Risk Free Rate Tax Rate Pre-Tax Cost of Debt Value 0.88 9.64% 2.41% 21.83% 2.99% Metric Equity Preferred Equity Short-Term Debt Long-Term Debt Total Capital Value 197,744 0 19,158 37,803 254,705

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