preform a sensitivity analysis using this data please 

 

Exhibit 1 Worldwide Paper Company Cost-of-Capital Information Interest Rates: January 15, 2016 Bank loan rates (LIBOR) 1-year 1.15% Market risk premium Historical average Amount of debt, D Amount of equity, BVE Amount of equity, MVE 6.0% Government bonds Corporate bonds (10-year maturities): 1-year 0.49% Aaa 2.45% 5-year 1.46% Aa 3.38% Weight of debt Weight of equity Weight of debt Weight of equity 10-year 2.04% A 3.85% 30-year 2.82% Baa 5.05% Tax rate Weighted Average Cost of Capital: Cost of debt: 3.57% (use cell reference) 3,000 at book values $2500.00 at book values $12000.00 at market value 54.55% using book values 45.45% using book values 20.00% using market value of 80.00% using market value of 40.00% (see case) Cost of equity: Risk-free rate 2.04% 10-year Treasury Worldwide Paper Financial Data Balance-sheet accounts (in millions of dollars) Bank loan payable (LIBOR + 1%) 500 Long-term debt Common equity Retained earnings 2,500 500 2,000 Beta Market risk premium Cost of equity WACC 8.64% Using CAPM 7.34% (using appropriate we 1.10 (use cell reference) 6.0% (use cell reference) Per-share data Shares outstanding (millions) 500 Book value per share $5.00 Recent market value per share $24.00 Other data Bond rating Beta A 1.10