Suppose the beta of Solarcitys equity is 1.8, calculate the WACC of Solarcity.
EXHIBIT 2: SOLARCITY INCOME STATEMENTS, 2014-2016 2014 2015 2016 174 81 255 294 106 400 422 308 730 79 114 167 281 170 309 479 251 176 79 119 In millions of US$ (ex cept for per share items) Revenue: Operating leases and solar energy systems incentives Solar energy systems and components sales Total revenue Cost of revenue: Solar energy systems sales and operating leases Depreciation and amortization Total cost of revenue Gross profit Operating expenses: Sales and marketing General and administrative Restructuring, Pre-production and other Research and development Total operating expenses Loss from operations Interest expenses Loss before income taxes Income tax benefit (provision) Net loss 457 443 239 156 245 229 175 65 55 19 414 -336 767 -648 118 -765 -3 -769 902 -650 170 -821 66 -402 27 -375 -820 Note: EPS = earnings per share Source: SolarCity SEC 10K Filings, Tesla Motors http://ir.tesla.com/secfiling.cfm?filingID=1564590-17-3084&CIK=1408356. Inc., accessed June 14 2017, EXHIBIT 4: SOLARCITY CASH FLOW STATEMENTS, 2014-2016 In Millions of US$ (except for per share items) 2014 2015 2016 -375.23 11.07 0.95 -97.35 112.48 130.23 -217.85 -768.82 14.05 -11.05 -125.34 125.47 -24.20 -789.88 -820.35 14.85 -32.95 170.58 -149.69 308.78 -508.78 -1,162.96 -22.89 -167.40 -1,665.64 -176.54 -44.59 -1,611.01 -62.90 0.00 Operating activities: Net loss Depreciation, amortization and write-offs Accounts receivable Inventories Accounts payable Other Operating Activities Net cash used in operating activities Investing activities: Payments for the cost of solar energy systems, leased and to be leased Purchase of property, plant and equipment Purchases of short-term investments Proceeds from sales and maturities of short-term investments Acquisitions and Other investments Net cash used in investing activities Financing activities: Borrowings under long-term debt Repayments of long-term debt Other Financing Cash Flow Items Proceeds from investments by non-controlling interests and redeemable Distributions paid to non-controlling interests and redeemable Net cash provided by financing activities before equity and convertible Proceeds from Convertibles and Options Net cash provided by financing activities Net increase in cash and cash equivalents 28.76 -20.33 -1,344.81 170.74 -10.70 -1,726.73 11.24 -26.67 -1,689.33 369.80 -336.56 287.73 1,093.26 -215.93 342.03 1,376.18 -866.95 332.66 777.96 1,097.49 1,420.82 -117.13 -109.51 -148.86 982.15 507.82 1,489.97 -72.70 2,207.33 187.45 2,394.78 -121.84 2,113.85 -7.58 2,106.27 -91.83 EXHIBIT 2: SOLARCITY INCOME STATEMENTS, 2014-2016 2014 2015 2016 174 81 255 294 106 400 422 308 730 79 114 167 281 170 309 479 251 176 79 119 In millions of US$ (ex cept for per share items) Revenue: Operating leases and solar energy systems incentives Solar energy systems and components sales Total revenue Cost of revenue: Solar energy systems sales and operating leases Depreciation and amortization Total cost of revenue Gross profit Operating expenses: Sales and marketing General and administrative Restructuring, Pre-production and other Research and development Total operating expenses Loss from operations Interest expenses Loss before income taxes Income tax benefit (provision) Net loss 457 443 239 156 245 229 175 65 55 19 414 -336 767 -648 118 -765 -3 -769 902 -650 170 -821 66 -402 27 -375 -820 Note: EPS = earnings per share Source: SolarCity SEC 10K Filings, Tesla Motors http://ir.tesla.com/secfiling.cfm?filingID=1564590-17-3084&CIK=1408356. Inc., accessed June 14 2017, EXHIBIT 4: SOLARCITY CASH FLOW STATEMENTS, 2014-2016 In Millions of US$ (except for per share items) 2014 2015 2016 -375.23 11.07 0.95 -97.35 112.48 130.23 -217.85 -768.82 14.05 -11.05 -125.34 125.47 -24.20 -789.88 -820.35 14.85 -32.95 170.58 -149.69 308.78 -508.78 -1,162.96 -22.89 -167.40 -1,665.64 -176.54 -44.59 -1,611.01 -62.90 0.00 Operating activities: Net loss Depreciation, amortization and write-offs Accounts receivable Inventories Accounts payable Other Operating Activities Net cash used in operating activities Investing activities: Payments for the cost of solar energy systems, leased and to be leased Purchase of property, plant and equipment Purchases of short-term investments Proceeds from sales and maturities of short-term investments Acquisitions and Other investments Net cash used in investing activities Financing activities: Borrowings under long-term debt Repayments of long-term debt Other Financing Cash Flow Items Proceeds from investments by non-controlling interests and redeemable Distributions paid to non-controlling interests and redeemable Net cash provided by financing activities before equity and convertible Proceeds from Convertibles and Options Net cash provided by financing activities Net increase in cash and cash equivalents 28.76 -20.33 -1,344.81 170.74 -10.70 -1,726.73 11.24 -26.67 -1,689.33 369.80 -336.56 287.73 1,093.26 -215.93 342.03 1,376.18 -866.95 332.66 777.96 1,097.49 1,420.82 -117.13 -109.51 -148.86 982.15 507.82 1,489.97 -72.70 2,207.33 187.45 2,394.78 -121.84 2,113.85 -7.58 2,106.27 -91.83
