CALCULATING A FIRM’S WACC Nestle Enterprises is estimating its cost of capital for the first time

firm’s debt carries an AAA rating, which is currently yielding 6%; the firm pays taxes at a rate of 30%
and the firm’s debt is equal to 20% of its enterprise value. What is Nestle’s WACC?

After tax cost of the Debt = 6% *(1-.30)

4.20%

Particulars Cost Weight WACC

Bonds 4.20% 20.00% 0.84% 40.00%
Common Stock 14.00% 80.00% 11.20% 60.00%
Total 12.04%

Therefore WACC = 12.04%

 of capital for the first time and has made the following estimates: The
m pays taxes at a rate of 30%; the cost of equity is estimated to be 14
’s WACC?

4.90% 1.96%
16.00% 9.60%
11.56%
YTM: yield to maturity
Face value 1,000.00
Current Price 1,081.26
Maturity 8
Terms semmi anual
Coupon rate 7.25%

Semi annual YTM 2.98%

Annual YTM 6.05%
 McDonald´s levered beta 0.56
Risk free rate 4.20%
Market risk premium 5%
McDonald´s debt 15.00
McDonald´s Enterprise Value 80.00
McDonald´s Debt beta 0.2

a)McDonal´s Corporation Beta 7.00%

b) Unlevered Beta 0.49250

 Datos
levered equity beta 1.25
teasure bond ("cete") 4.28%
market risk premium 3.50% 7% TENEMOS 7% PERO DEBERIAMOS ANDAR ENTRE 3-4
tax rate 25%
debt % of capital structure

a)
Cost equity low ERP High ERP
8.66% 13.03% Calculamos con ambas con la que deberiamos tener y

b)

Datos despues de tax Product

capital 75% 8.66% 0.0649125
deuda 25% 3.84% 0.0096094
tax 25% 7.45%
costo de deu 5.125%

Equity 8.66%
debt 3.84%
AMOS ANDAR ENTRE 3-4

a que deberiamos tener y la que tenemos