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How do I calculate The weighted average cost of capital (WACC)? based on the information in this picture Case 18 Worldwide Paper Company 251 EXHIBIT

How do I calculate The weighted average cost of capital (WACC)? based on the information in this picture

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Case 18 Worldwide Paper Company 251 EXHIBIT 18.1 Cost-of-Capital Information Interest Rates: January 15, 2016 Bank loan rates (LIBOR) Market risk premium 1-year 1.15% 6.0 % Historical average Government bonds Corporate bonds (10-year maturities) 1-year 0.49 % Aaa 2.45% 1.46 % 5-year 3.38% Aa 10-year 2.04% 3.85% A 30-year 2.82% aa 5.05% Worldwide Paper Financial Data Balance-sheet accounts (in millions of dollars) Bank loan payable (LIBOR + 1%) 500 Long-term debt Common equity 2,500 500 2,000 Retained earnings Per-share data 500 Shares outstanding (millions) $ 5.00 Book value per share $24.00 Recent market value per share Other A Bond rating 1.10 Beta Source: Datastream $57 Case 18 Worldwide Paper Company 251 EXHIBIT 18.1 Cost-of-Capital Information Interest Rates: January 15, 2016 Bank loan rates (LIBOR) Market risk premium 1-year 1.15% 6.0 % Historical average Government bonds Corporate bonds (10-year maturities) 1-year 0.49 % Aaa 2.45% 1.46 % 5-year 3.38% Aa 10-year 2.04% 3.85% A 30-year 2.82% aa 5.05% Worldwide Paper Financial Data Balance-sheet accounts (in millions of dollars) Bank loan payable (LIBOR + 1%) 500 Long-term debt Common equity 2,500 500 2,000 Retained earnings Per-share data 500 Shares outstanding (millions) $ 5.00 Book value per share $24.00 Recent market value per share Other A Bond rating 1.10 Beta Source: Datastream $57

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