You will estimate the weighted average cost of capital of a publicly-traded company: Telus. Although you must use the most recent stock market data, you should use the 2019 Annual Report for the financial statement information. You are required to follow the instructions outlined below and produce a report in the form of an executive summary, which should be no more than one page long. The report should stand on its own. You must include all your data and formulas as a reference tool to support your Word document. You will probably use Excel for your calculations.

To estimate the cost of capital, you will need to estimate the cost of equity of the company using the capital asset pricing model. You need to estimate beta yourself, showing the calculations in the accompanying spreadsheet, the cost of debt, and the appropriate weights to use for each of them. Because data on preferred shares can be difficult to find, you can ignore them for the purposes of this assignment. Does your estimate seem reasonable? Why or why not?

• Professional presentation of your report including referencing.

• Correct use of CAPM to estimate the cost of equity.

• Appropriate methods used to estimate the cost of capital.

• Discussion of reasonability of your estimate.

• find the value of risk-free rate, risk premium and beta, CAPM return of Telus 2019.

• find the value of the cost of equity, the value of equity, pre-tax cost of debt, income before tax, income tax expense, tax rate after-tax cost of debt, the value of debt, WACC of Telus 2019.

• find the value of past year dividend, a dividend paid, earnings, payout ratio, ROE, sustainable growth rate, estimated price, current price of Telus 2019.

• Note: using the consolidated income statement of Telus 2019 and recent stock market data.