Compute the weights for Disneys equity and debt based

Compute the weights for Disneys equity and debt based

  1. Compute the weights for Disney’s equity and debt based on the market value of equity and Disney’s market value of debt, computed in Step 5.
  2. Calculate Disney’s cost of equity capital using the CAPM, the risk-free rate you collected in Step 1, and a market risk premium of 5%.
  3. Assuming that Disney has a tax rate of 35%, calculate its after-tax debt cost of capital.

Sep 17 2015 01:52 PM