Question
I need help with calculating the WACC for GE. I have an example given in my class, but it does not show the formulas I
I need help with calculating the WACC for GE. I have an example given in my class, but it does not show the formulas I need to calculate the WACC. Below is the example with three stars (***) next to the variables I don't know how to calculate. Can someone help me figure this out?
| Risk free rate | 2.4% | treasury.gov |
| Beta | 0.58 | yahoo finance |
| Expected market return | 7.14% | Morningstar |
| Market Risk Premium | 4.74% | Calculated |
| ***Cost of equity | 5.15% | Calculated |
| ***Tax rate | 37.50% | Calculated |
| ***Nominal cost of net debt | 4.18% | Wgt Avg calculated |
| ***After ta cost of debt | 2.61% | Calculated |
| Shares outstanding (millions) | 289.78 | Yahoo finance |
| LMT share price | $258.20 | Yahoo finance |
| ***Market Value of Equity (millions) | $74,821 | Calculated |
| Net Financial Obligations | $14,171 | Reformulated Balance sheet |
| ***Market valaue of firm | $88,992 | Calculated |
| ***Weight of Equity | 84.08% | Calculated |
| ***Weight of debt | 15.92% | Calculated |
| ***WACC | 4.75% | Calculated |
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Practical Guide To Auditing SAP Systems
Authors: Martin Metz, Sebastian Mayer
1st Edition
3960126409, 978-3960126409
