Question
I was given the first 5 data points in the WACC Calculation box shown below and I calculated the next 3. I need help calculating
I was given the first 5 data points in the WACC Calculation box shown below and I calculated the next 3. I need help calculating WACC, assuming that the pieces needed for the formula are contained in this box (?). My understanding is that the formula for WACC is: cost of equity * value of equity / (debt + equity) + cost of debt * value of debt / (debt + equity). I don't understand how this formula corresponds to the data points contained in this box. Please help!
Ok--the attachment will not attach. Here is what it contained:
WACC Calculation:
Asset beta . 0.82
risk-free rate . 4.86%
market risk premium 5%
cost of debt 6%
target d/v . 35%
implied debt beta . 0.23
re-levered equity beta . 1.14
cost of equity . 10.55%
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