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School
New York University *
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Course
MISC
Subject
Finance
Date
Nov 24, 2024
Type
png
Pages
1
Uploaded by AgentEnergy11479
Assumptions:
Risk Free
Rate
(Rf)
4.56%
Risk
Premium
8%
The
cost
of
equity
1s
16.19
%
(NYSE)
and
14.01
%
(S&P
500)
Cost
of
Debt
In
this
analysis.
the
cost
of
debt
1s
calculated
using
Regression
Analysis.
1n
order
to
achieve
a
Yield
to
Maturity
(YTM)
value
that
1s
representative
of
the
total
outstanding
bonds
in
the
company
(Refer
Table
04).
Using
Regression
Analysis
(Refer
Table
04).
the
cost
of
debt
(Rd)
1s
5.54%
Calculation
of
WACC
Substituting
the
below
assumed
values
and
derived
values
of
Re and
Rd
in
Equation
1.
Assumptions:
E/(E+D)
0.656
D/(E+D)
0.344
WACC
(NYSE)
=12.52%
and
WACC
(S&P
500)
=10.43%
WACC
CALCULATION
NYSE
S&P
500
Beta
unlevered
(Boemng)
0.746
0.525
Beta
unlevered
(Lockheed)
0.387
0.255
Beta
unlevered
(Northrop)
0.311
0.207
Beta
unlevered
(Boeing-Defense)
0.349
0.231
Total
Defense
0.160
0.106
Total
Commercial
0.585
0418
Commercial
Beta
unlevered
1.084
0.774
Commercial
Beta
levered
1.453
1.181
Cost
of
Equity
16.19%
14.01%
WACC
12.52%
10.43%
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