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What is Disneys weighted average cost of capital (WACC)? Cost of Capital Components Capital Structure $ in Millions Beta 0.95 Equity 157,215 Expected return of

What is Disneys weighted average cost of capital (WACC)?

Cost of Capital Components

Capital Structure

$ in Millions

Beta

0.95

Equity

157,215

Expected return of the market

10.36%

Preferred equity

0

Risk free rate

3.14%

Short term debt

5,992

Tax Rate

12.02%

Long-term debt

17,681

Pre-Tax cost of debt

3.07%

Total capital

180,888

3. How may Disneys WACC be impacted by stated changes in its operating environment. Consider the following scenarios:

1. an increase in the Federal Reserve reference rate;

2. a two notch downgrade in Disneys credit rating;

3. adding debt to Disneys capital structure for an acquisition;

4. a downturn in the US equity market; and,

5. an increase in Disneys marginal income tax rate?

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