WACC for Target as of January 2020 Key assumptions: Market risk premium of 5%, tax rate of 21% The spreadsheet template includes financial data on the (1) January 2020 treasury curve, (2) Target's income statement, (3) Target's balance sheet, (4) Target's recent equity returns and January 2020 market capitalization, and (5) Target's debt structure and credit rating. a) Compute the equity beta for Target using the recent returns. b) Compute the cost of equity using CAPM. c) Compute the cost of debt, using both the average cost of the firm's existing debt method and the yield-to-maturity method. Decide which of these methods is more appropriate for the ultimate cost of debt input to WACC - place this estimate in cell B23. d) Compute the WACC.