WACC

WACC Assignment Template

Estimating cost of equity using DGM							Solution Legend
Estimating Dividend Growth							Value given or to be downloaded from data website
Year	Dividend (from Yahoo) Author: If your company does not pay dividends, check FAQ for this module	Growth	1+g				Formula/Calculation/Analysis required
Year 1
Year 2
Year 3
Year 4
Year 5
	Average
Current Price Author: From Yahoo Finance or other sources
Expected Dividend
Growth Estimate
Cost of equity
Estimating cost of equity using CAPM (SML)
Item	Source	Value
Risk free rate	Treasury Yield Curves
MRP	Damodaran (you may estimate historical risk premium or use implied premium)
beta	Yahoo
Cost of equity
Cost of equity used in WACC can be one of the values calculated, average, or some other number, subjectively adjusted
Cost of equity used
Estimating Cost of Debt
Most recently issued bond data, or bond with longest maturity
Source	FINRA-Morningstar
Maturity
Coupon rate
Face Value
Price
Payments
Number of payments
PV
Payment
Future Value
Per period rate
Cost of debt (annual)
Item	Source	Value
Value of Debt	SEC
Market Cap	Yahoo
Tax rate	IRS		You may assume 21%
WACC

http://www.sec.gov/edgar/searchedgar/companysearch.html http://finance.yahoo.com/ http://www.irs.gov/publications/p542/ar02.html http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datacurrent.html http://finance.yahoo.com/ http://finra-markets.morningstar.com/MarketData/Default.jsp