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

$2021$ Annual Report for the financial statement information. You are required to follow

the instructions outlined below and produce a written report that begins with an

executive summary of your findings, which should be no more than one page long.

Instructions

To estimate the cost of capital, you will need to estimate the cost of equity for Telus

using the capital asset pricing model. Because data on preferred shares can be

difficult to find, you can ignore them for the purposes of this assignment. You need to

estimate beta yourself, not just look it up$.$ You must use the most recent market data

available. Show the calculations in your Excel file.

To estimate the risk$-$free rate, go to the Bank of Canada website and use an average

of the current $10-$year bond rates. Use $6\%$ as a risk premium, and use the current

Telus market capitalization. You will need to use the $2021$ Telus financial statements

to calculate the pre$-$tax cost of debt, the tax rate, the after$-$tax cost of debt, and the

value of debt.

See the criteria below for mark distribution:

Professional presentation of your report including referencing $(10$ marks$)$

Correct use of CAPM to estimate the cost of equity $(30$ marks$)$

Correct calculation of the cost of debt $(40$ marks$)$

Correct calculation of the weighted average cost of capital $(10$ marks$)$

Discussion of the reasonability of your estimate $(10$ marks$)$