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    Cost of equity wacc and unleveared cost of equity

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    Need to calculate the cost of equity, wacc, and unleavered cost of equity for senior housing Properties trust. I have downloaded the financial statements for this company.

    Cathy Kendall
    Unit One Individual Project: Financial Analysis Introduction
    FIN620-1101C

    Senior Housing Properties Trust
    Consolidated Statement of Income
    (In thousands, Except Per Share Amounts)

    Year Ended December 31,
    2009 2008 2007
    Revenues
    Rental income 296,777 233,210 185,952
    Interest and other income 1,003 2,327 2,070
    Total Revenues 297,780 235,537 188,022

    Expenses:
    Property operating expenses 14,273 2,792 -
    Interest 56,404 40,154 37,755
    Depreciation 78,583 60,831 47,384
    Acquisition Costs 3,327 - -
    General and Administrative 20,345 17,136 14,154
    Impairment of assets 15,530 8,379 1,400
    Loss on early extinguishment of debt - - 2,026
    Total Expenses 188,462 129,292 102,719

    Income before gain of sale of properties 109,318 106,245 85,303
    Gain on sale of properties 397 266 -
    Net Income: 109,715 106,511 85,303

    Weighted average shares outstanding 121,863 105,153 83,168

    Basic and diluted earnings per share:
    Income before gain on sale of properties $0.90 1.011 1.03
    Gain on sales of properties - - -
    Net Income $0.90 1.011 1.03

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    Hi,

    Get the answer with attachment.

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    Answer:
    We have,
    Beta of Senior Housing Properties Trust=1.10 (Yahoo! Finance)
    Debt /Equity (2009)=$1,087,276/$1,900,650=0.57
    Tax rate=35% (assumed)
    Risk free rate=0.05% (3 month t-bill ...

    Solution Summary

    The cost of equity WACC and unlevered cost of equity is examined.

    $2.19

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