Question
I am having a hard to find the market value(Auozone) to calculate the WACC. Please help me out to figure this out. a. State the
I am having a hard to find the market value(Auozone) to calculate the WACC.
Please help me out to figure this out.
a. State the company that you chose. Find out the company's ticker symbol, hyperlinks to the web pages that you will need to find all of the information necessary to calculate the cost of equity. Use a market risk premium of seven percent when using CAPM.
Ticker symbol: AZO
Stock quote link https://finance.yahoo.com/quote/AZO/key-statistics?p=AZO
Stock price: $1,102.82
Dividend: N/A
Key statistics link https://finance.yahoo.com/quote/AZO/key-statistics?p=AZO
Beta: 0.73
Shares outstanding: 24.53M 24,530,000
Bond center link: https://finance.yahoo.com/bonds
Risk-free rate: 1.68%
Market risk premium: 7.00%
Market value of equity: 27,052,174,600
Cost of equity
CAPM: 6.79%
b. Create hyperlinks to the FINRA bond quote website and the SEC EDGAR database and find the information for the company's bonds. Create a table that calculates the cost of debt for the company. Assume the tax rate is 35 percent.
http://finra-markets.morningstar.com/BondCenter/Results.jsp
https://www.sec.gov/Archives/edgar/data/866787/000119312519168161/0001193125-19-168161-index.htm
(Assume the target capital structure equals to the market value weight)
Maturity YTM "Quoted
Price" Book Value Market Value "Market Value
Weight" Weighted cost of debt
2020-11-15 1.998% 102.027 $- #DIV/0! #DIV/0!
2021-04-14 2.480% 100.300 0.000%
2022-04-15 2.229% 103.481 0.000%
2023-01-15 2.392% 101.478 0.000%
2023-07-15 2.378% 102.630 0.000%
2024-04-18 2.510% 102.670 0.000%
2025-04-15 2.641% 103.071 0.000%
Total market value = $- Cost of debt = #DIV/0!
Tax rate: 35%
Aftertax cost of debt:
Cost of equity:
Market value of equity: $
Aftertax cost of debt:
Market value of debt: $
c. Finally, calculate the market value weights for debt and equity. What is the WACC for the company?
Weight of debt:
Weight of equity:
WACC:
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