Mini Case Estimate the cost of capital for Eastman Chemical Company (Ticker: EMN) 1. Cost of Equity a. CAPM Model i. Use 3.35% as the risk-free rate ii. Use 7% as the market risk premium iii. Collect the past five year monthly prices for EMN and S&P 500 index iv. Calculate monthly returns v. Use regression analysis to calculate Beta, and calculate the cost of equity vi. Use Yahoo Finance Beta to calculate the cost of equity b. DCF Model i. Use Yahoo Finance to collect data ii. Calculate the cost of equity Compare the cost of equity using CAPM to the cost of equity using DCF. Do you observe any significant difference? What are the factors that may cause the differences? 2. Cost of Debt i. Use bond information provided in the template (DO NOT use FINRA to collect the data since FINRA changed it data recently). Calculate the market value for each bond. Calculate the YTM for each bond. ii. Calculate the cost of debt for EMN 3. Weighted Average of Capital i. Calculate the weighted average cost of capital (assume the tax rate is 30%).