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WACC Assignment

This document outlines the steps to calculate the weighted average cost of capital (WACC) for a company. It involves: 1) Calculating monthly returns over 5 years for the company, Nifty, and government bonds. 2) Calculating the company's beta. 3) Using CAPM to calculate the cost of equity. 4) Calculating the cost of debt from financial statements. 5) Determining the market value of equity and debt. 6) Calculating WACC using the market value weights.

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Suyash Patil
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143 views1 page

WACC Assignment

This document outlines the steps to calculate the weighted average cost of capital (WACC) for a company. It involves: 1) Calculating monthly returns over 5 years for the company, Nifty, and government bonds. 2) Calculating the company's beta. 3) Using CAPM to calculate the cost of equity. 4) Calculating the cost of debt from financial statements. 5) Determining the market value of equity and debt. 6) Calculating WACC using the market value weights.

Uploaded by

Suyash Patil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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You are required to calculate for Weighted Average cost of capital (WACC) of the same

company you have taken for SAPM presentation using the following steps:

1. Calculate 60 monthly returns of your company, NIFTY & GOI 10 Year bond (Risk free
instrument) as taught in the excel session (using past 5 years monthly prices). You can take
the monthly prices from Oct 1 2014 to Sep 30 2019.

2. Calculate Beta of your company

3. Calculate CAPM return of your company (use it as cost of equity)

4. Calculate Cost of Debt (from consolidated P&L and Balance sheet of year 2018-19 or
2017-18 if latest figures are not available for a particular company)

5. Calulate Market value of equity (Market Capitalization) as on 30.09.2019 & take market
value of debt = book value of debt.

6. Calculate WACC using market value weights

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