fin402wacc19.docx - Finance 4020 Fall 2019 Spreadsheet Project 1 Calculating the Cost of Capital Due September 12th at the beginning of your class

fin402wacc19.docx - Finance 4020 Fall 2019 Spreadsheet...

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Finance 4020, Fall 2019 Spreadsheet Project 1: Calculating the Cost of Capital Due September 12th at the beginning of your class section You’ve just started your first job (congratulations!) Your supervisor has asked that you to calculate WACCs for Coca-Cola and PepsiCo. Coca-Cola: Go to the SEC website and get the most recent quarter-end balance sheet for Coca- Cola. Note the quarter-end date, the number of shares outstanding (common and preferred), and any information on long-term debt or notes payable. Coca-Cola has several classes of debt. To simplify things, let’s assume that Coca-Cola will continue with their current proportion of debt but will have only one outstanding class (let’s use the class closest to matching with the ten-year treasury bond that we will use below). PepsiCo.: Go to the SEC website and get the get the most recent quarter-end balance sheet balance sheet for PepsiCo. Note the quarter-end date, the number of shares outstanding (common and preferred), and any information on long-term debt or notes payable. PepsiCo has several classes of debt. To simplify things, let’s assume that PepsiCo will continue with their current proportion of debt but will have only one outstanding class (let’s use the class closest to matching with the ten-year treasury bond that we will use below). Find the weights for the two firms’ capital structures. Weights should be based on future expectations of the capital structure on a market value basis. For simplicity, assume that the future expectation weights are the same as the current market-values weights.
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