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WACC

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Google is the target company using a two-year financial analysis, need to calculate the WACC for 2008 and 2009.

Attached are the financial reports for 2008 and 2009 and relevant links.

Investor relations
http://investor.google.com/financial/2008/filings-archives.html

Quarterly Earnings
http://investor.google.com/earnings.html

Financial Tables
http://investor.google.com/financial/tables.html

© BrainMass Inc. brainmass.com October 25, 2018, 3:38 am ad1c9bdddf
https://brainmass.com/business/weighted-average-cost-of-capital/348009

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As source of financial data, I have used Capital IQ for getting ...

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Figuring the WACC, the unlevered beta & WACC with new capital structure

As the Vice President of a Finance company with the following available data:

Total assets $ 10,000,000.00
Debt $ 2,500,000.00
common equity $ 7,500,000.00
before tax cost of debt 12.00%
risk-free rate 5.00%
Market Return 16.00%
beta at current capital structure 1.20
Tax Rate 40%

What is my firms's current Weighted Average Cost of Capital (WACC)?

What is my firm's unlevered beta?

If I am considering changing my firm's capital structure to 40% debt and 60% common equity, to make this change, I will issue additional debt and use the proceeds to repurchase common stock. If I do this, the before tax cost of debt will rise to 14%. What would be my firm's WACC if you adopt this new capital structure?

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