HOMEWORK 6 - BETA AND COST OF CAPITAL CALCULATIONS (70 Points)

Calculate Beta for Walt Disney (DIS). Use the S&P 500 as your proxy index of the stock market performance. Calculate the Beta for the period from October 1, 2019 through September 30, 2020 using WEEKLY performance data for both the stock and the index. Please provide the worksheet that shows the stock and index values and the calculated stock and market returns that you used to calculate your Beta. Also provide the spreadsheet showing your Beta Calculation (30 points)

Once you have calculated the Beta for DIS, calculate the company's estimated Cost of Equity using CAPM. Rather than give you what I think you should use for both the market risk premium (Kmp) and the risk-free rate (Krf), I would like you to identify what you feel should be used for these inputs. Be sure that you identify the inputs you used in calculating your Cost of Equity by entering them in the appropriate spaces below and include a few sentences either below or on a separate page that explain why you chose the inputs you did for both Kmp and Krf. (10 points)

Using information from Disney's 2020 10-K Balance Sheet and Income Statement (Disney's fiscal year 2020 ended in October 3, 2020 - DO NOT USE THE 2021 10-K IF IT IS PUBLISHED BEFORE THIS ASSIGNMENT IS DUE!!), calculate out this company's WACC. Be sure to highlight the inputs and assumptions you made in calculating out your WACC by filling in the appropriate spaces below. (20 points) And finally, do a little bit of research and identify what DIS's BETA is based on any financial database of your choosing and write that figures in the space below. Why does the published BETA deviate from your calculated BETA - speculate why!! (10 points)

(in Millions)Beta for DIS = Ave. Total Assets FY 2020 = Market Premium (Kmp) = Ave. Total Equity FY 2020 = Risk-free rate (Krf) = Ave Interest-bearing Debt FY 2020 = Total interest Expense FY 2020 = Cost of Equity (Ke) = Income Tax Expense FY 2020 = Cost of Debt (Kd) = EBT FY 2020 = Tax Rate = % Equity (We) = % Int-bearing Debt (Wd)= Published Beta for DIS = Calculated WACC = SUBMIT THIS SHEET (FILLED OUT OF COURSE) WITH YOUR OTHER EXCEL WORKSHEETS