WACC Intro to Finance Memorandum Summary PDF

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Summary

for mandatory assignment in the course worth 20%. Consists of multiple parts and is a significant part of your mark. The...

Description

Cogeco Communications Value BBB 1.56% 0.46% 2.02%

Debt Rating Yield Spread 7-year Gov't Bond Return on Debt

Book Value of Long-Term Debt Shares Outstanding Share Price Market Value of Equity Company Value Proportion of Debt Proportion of Equity WACC DDM - Historical Growth (r(equity) = 13.14%) DDM - Sustainable Growth (r(equity) = 14.18%) CAPM (r(equity) = %3.55)

$ $ $ $ $

December 31st, 2020 Yield Spread + 7-year Gov't Bond

Value 3,050,340,000 32,220,000.00 118.07 3,804,215,400 6,854,555,400 44.50% 55.50%

Documentation Ratings, Interest Coverage Ratios, and Default Spread Data Ratings, Interest Coverage Ratios, and Default Spread Data Bank of Canada 1.56% + 0.45% = 2.02% Documentation

August 8th, 2020 December 31st, 2020 March 31st, 2021 Share Price x Shares Outstanding Long-Term Debt + Market Value of Equity Long-Term Debt / Company Value Market Value of Equity / Company Value

Value

Yahoo Finance Yahoo Finance Yahoo Finance 32,220,000 x 118.07 3,050,340,000 + 3,804,215,400 3,050,340,000/6,854,555,400 3,804,215,400/6,854,555,4000 Documentation

Formula: 7.96%

WACC = D/V rd(1-Tr) + P/V rp + E/V rE Sample Calculation:

8.53% 2.64%

WACC = (44.50% x 2.02%(1-0.26)) + 0 + (55.50% x 13.14%)...