Consider two companies:
Look at the profiles (financial statements for 2018) of each on yahoo finance and discuss the followings (you need to calculate these values yourself and show details of your calculations):
- How many outstanding shares the company has?
- What is the market value of the company?
- What is the book value of the company?
- What is the beta for the company?
- How do you find the risk free rate? (consider the market risk premium to be 8%)
- Using CAPM calculate the expected return on the equity for the company.
- (To get the required rate of return on debt, divide the interest expense by total debt)
- (To get the total debt, add the short term debt to long term debt)
- What is the Weighted average cost of capital (WACC) for the company?
- What is the leverage (total debt/equity ratio) for the company?