1. You now need to calculate the cost of debt for SNA. Go to finra-markets.morningstar.com, enter SNA as the company, and find the yield to maturity for each of SNAs bonds. What is the weighted average cost of debt for SNA using the book value weights and using the market value weights? Does it make a difference in this case if you use book value weights or market value weights? You now have all the necessary information to calculate the weighted average cost of capital for SNA. Calculate the WACC using book value weights and market value weights. SNA has a 21 percent tax rate. Which number is more relevant? You used SNA as a pure play company to estimate the cost of capital for MT. Are there any potential problems with this approach in this situation?

2. 1. Balance sheet of Snap-On Tools (SNA) (10-Q) Book value of debt: $1,200.1 million Book value of Equity: $4,069.3 million Balance sheet of Snap-On Tools (SNA) (10-K) Book value of debt: $1,450.6 million Book value of Equity: $3,846.6 million 2. The most recent stok price SNA is : $221.25 Market capitalization of SNA: $11,887.762 million (SNA) Snap-On Tools outstanding stock is: $53.73 million shares The foward annual dividend for Snap-On Tools is: $5.68 The cost equity for SNA: 8.56% The beta for SNA: 1.24 Final estimate for the cost equity: 7.483%