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Using the Case Study Notes and the accompanying spreadsheet, calculate the WACC of each Microsoft segment comparable. Describe the primary WACC drivers that explain the
Using the Case Study Notes and the accompanying spreadsheet, calculate the WACC of each Microsoft segment comparable. Describe the primary WACC drivers that explain the differences between the WACC of Microsoft and its comparables.Can someone solve this ?
Weighted Average Cost of Capital Case Calculations Capital Structure Components WACC Cost of Capital Components Expected Return of Risk Free Market Rate Tax Rate Pre-Tax Debt Cost Bond Rating Short-Term Long-Term Debt Debt Total Capital Beta Equity Target Microsoft Q1 Q2 8.072 1,08 1,07 9,95% 10,71% 3,06% 2,68% 51,39% 15,99% Moody's AAA AAA 2,525% 2,525% 878.361,6 780.362,3 79.856 80.301 966.289,6 865.845,3 9,66% 10,37% 5.182 Peers IBM 1,02 1,05 Q1 02 Q1 Q2 9,64% 9,35% 9,93% 10.18% 2.41% 2,01% 2,86% 2,99% 28,52% 27,67% 60,00% 60,00% 2.992% 2,653% 3,600% 3,600% A1 A1 A3 125.105.3 122.162,2 185.138,4 177.096,3 11.563 15.913 3.743 6.477 37.142 56.126 54.386 51.561 173.810,3 194.201,2 243.267,4 235.134,3 7,64% 6,82% 9,14% 8,73% Oracle 1,23 1,13 Weighted Average Cost of Capital Case Calculations Capital Structure Components WACC Cost of Capital Components Expected Return of Risk Free Market Rate Tax Rate Pre-Tax Debt Cost Bond Rating Short-Term Long-Term Debt Debt Total Capital Beta Equity Target Microsoft Q1 Q2 8.072 1,08 1,07 9,95% 10,71% 3,06% 2,68% 51,39% 15,99% Moody's AAA AAA 2,525% 2,525% 878.361,6 780.362,3 79.856 80.301 966.289,6 865.845,3 9,66% 10,37% 5.182 Peers IBM 1,02 1,05 Q1 02 Q1 Q2 9,64% 9,35% 9,93% 10.18% 2.41% 2,01% 2,86% 2,99% 28,52% 27,67% 60,00% 60,00% 2.992% 2,653% 3,600% 3,600% A1 A1 A3 125.105.3 122.162,2 185.138,4 177.096,3 11.563 15.913 3.743 6.477 37.142 56.126 54.386 51.561 173.810,3 194.201,2 243.267,4 235.134,3 7,64% 6,82% 9,14% 8,73% Oracle 1,23 1,13
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