Question
My Company is CVS Health Corp. I need to estimate CVS's approximate WACC; use the most recent year's debt ratio to find the weights of
My Company is CVS Health Corp.
I need to estimate CVS's approximate WACC; use the most recent year's debt ratio to find the weights of debt and equity. If your company issues preferred stock, for simplicity's sake, ignore it. The cost of debt will be the approximate YTM calculated in Week 5. Use CAPM to calculate your company's required rate of return on stock. The beta was determined in Week 6; use the current 10-year Treasury bonds' YTM as the risk-free rate. Using a reliable source, research the current market's expected rate of return (for example, the S&P 500). Be sure to mention all reference sources.
I have included below the calculations from Week#5. Please help.
Week#5 Assignment is as Follows:
Based on the bonds' current YTM for CVS Health Corp., calculate the average current yield.
Name
Amount
Price
YTM%
ACY%
Cvs Health 5.125%
3,500.00
115.50
5.125
3.3
Cvs Health 3.875%
2,828.10
105.00
3.875
3.713
Cvs Health 2.8%
2,750.00
102.20
2.800
3.772
Cvs Health 1.9%
2,250.00
100.20
1.900
4.453
Cvs Health 2.125%
1,750.00
99.40
2.125
5.68
Cvs Health 2.875%
1,750.00
97.60
2.875
5.577
Cvs Health 3.5%
1,500.00
104.60
3.500
6.973
Cvs Health 4%
1,250.00
107.40
4.000
8.592
Cvs Caremark Corporation 2.75%
1,250.00
100.80
2.750
8.064
Cvs Caremark Corporation 2.25%
1,250.00
100.60
2.250
8.048
Morningstarcom.(2018).Morningstarcom.Retrieved29 May 2018,from http://www.morningstar.com/stocks/xnys/cvs/quote.htm1
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