Cr Spread 300 basis points Enter data in yellow cells

Equity 666.66 Do not touch blue cells

Debt 1,200.00
D+E 1,866.66
Tax Rate 40%

Given Calc Comment

B(debt) 0.30 You must fill out either cell B11 or B12 depending upon whether you
B(equity) 1.7706 want to solve for B(equity) or B(asset).
B(asset) 1.0070 0.8512 NOTE: Either cell B11 or B12 MUST have a number, or you get a circular reference

Given Calc
r(rf) 6.00%
premium 8.50%
r(debt) 9.00%
r(equity) 21.05%

Calc
cost(d) 5.40% =rd*(1-t)
cost(e) 21.05% =rf+Be(mkt. premium)
cost(a) 14.56% Like cost(e) but uses B(asset)
wacc(ed) 10.99%
wacc(ad) 8.67% Like wacc(ed) but uses cost(a)

DEFINITION OF TERMS
Equity = $ of equity
Debt = $ of Debt
D+E = $ of Debt + Equity
B(debt) = Beta of debt
B(equity) = Beta of equity
B(asset) = Beta of asset
r(rf) = Risk free return
premium = Risk premium (Return on market - Risk free freturn)
r(debt) = Return on debt
r(equity) = Return on equity
cost(d) = Cost of debt (after tax) = r(debt)*(1-tax)
cost(e) = Cost of equity, using CAPM with Beta of Equity
cost(a) = Cost of equity, using CAPM with Beta of Asset
wacc(ed) = WACC using Beta of Equity in cost(e) function
wacc(ad) = WACC using Beta of Asset in cost(e) function
a circular reference