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Eaton WACC Framework

This document contains inputs and calculations for determining the weighted average cost of capital (WACC) for a company. It includes the company's market value of equity and debt, asset beta, costs of debt and equity using the CAPM model, and WACC. It also lists comparable companies and their equity betas and calculated asset betas, which are averaged to determine the asset beta for the company.

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183 views6 pages

Eaton WACC Framework

This document contains inputs and calculations for determining the weighted average cost of capital (WACC) for a company. It includes the company's market value of equity and debt, asset beta, costs of debt and equity using the CAPM model, and WACC. It also lists comparable companies and their equity betas and calculated asset betas, which are averaged to determine the asset beta for the company.

Uploaded by

SaraQureshi
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 XLSX, PDF, TXT or read online on Scribd
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Inputs

Formula Macro Data


βe=βa*(1/(1-L)) Risk Premium
Risk Free Rate
Re=Rf+βe(Rm-Rf) Tax Rate
Debt Rate Premium

Capital Structure

Market Value of Equity Value of Debt


Price per share $94.72 Debt
Number of Shares outstanding $ 413,300,000.00
Market Value of Equity $ 39,147,776,000.00

Asset Beta

Equity Beta 1.09


Asset Beta 0.872

Cost of Capital

Cost of Debt 2.6800%


Cost of Equity Re - CAPM 7.3700%
WACC 6.3650%
5.00%
1.92%
13%
0.8%

Market Leverage
$ 8,225,000,000.00 Actual D/V 17.36%
Target D/V 20%
Inputs

Formula Macro Data


βe=βa*(1/(1-L)) Risk Premium
Risk Free Rate
Re=Rf+βe(Rm-Rf) Tax Rate
Debt Rate Premium

Capital Structure

Asset Beta

Comparable 1 Comparable 2

Equity Beta 1.72 Equity Beta


Market Leverage 18% Market Leverage
Asset Beta 1.4104 Asset Beta

Average Asset Beta 1.25725

Cost of Capital

Equity Beta 1.5715625


Cost of Debt 3.2%
Cost of Equity Re - CAPM 9.8%
WACC 8.38%
5.00%
1.92%
13%
1.3%

Leverage
Actual D/V 17%
Target D/V 20%

Comparable 3 Comparable 4

1.51 Equity Beta 1.38 Equity Beta


16% Market Leverage 9% Market Leverage
1.2684 Asset Beta 1.2558 Asset Beta
1.52
28%
1.0944

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