Question

In: Finance

IN EXCEL PLEASE!!! Thank you! E(rM) 7.50% rf 3.00% Stock price 53.92 Stock beta, bE 0.72...

IN EXCEL PLEASE!!! Thank you!

E(r_M)	7.50%
r_f	3.00%
Stock price	53.92
Stock beta, b_E	0.72
Cost of debt	6.22%
Percentage of equity	75.70%
Percentage of debt	24.30%
Boeing's tax rate, T_C	24.96%

Boeing's debt beta, b_D
Boeing's asset beta
Boeing's WACC

Expert Solution

Weighted Average cost of Capital (WACC)

Where,

W = Weights

Ke = Cost of equity

Kd = Cost of debt

t = tax rate

Beta of Assets

Cost of Equity under CAPM

Where,

Rf = risk free rate

Rm = Market Return

Using CAPM, Beta of Debt

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

jeff jeffy answered 2 years ago

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