question archive You work in Walt Coca Cola Company's corporate finance and treasury department and have been assigned to the team estimating Coca Cola's WACC
You work in Walt Coca Cola Company's corporate finance and treasury department and have been assigned to the team estimating Coca Cola's WACC
Subject:FinancePrice: Bought3
You work in Walt Coca Cola Company's corporate finance and treasury
department and have been assigned to the team estimating Coca Cola's WACC. You must estimate this WACC in preparation for a team meeting later today. You quickly realize that the information you need is readily available online.
1. You will first have to download into excel Coca Cola's Financial Statements for the past 2 fiscal years. Go to SEC EDGAR Company Search and use the option to the right using Coca Cola's Ticker "KO" to look for the information. Remember to use the 10Ks (these have the annual reports). Note: You can use the information that you used for your first project.
2) Go to http://finance.yahoo.com. Under "Market Data" you will find the yield to maturity for 10-year Treasury bonds listed as "10 Yr Bond(%)." Collect this number as your risk-free rate. The other way to look for it is to type the 10 year bond ticker symbol "TNX". Remember that the information displayed is in percentage, i.e if the yield says 1.2 it means 1.2%
3) Still in Yahoo Finance, in the box next to the "Look Up" button, type Walt Coca Cola's ticker symbol KO), and click "Search." Once you see the basic information for Coca Cola, find the current stock price and click "Key Statistics" on the left side of the screen. Collect Coca Cola's number of shares outstanding and beta. (You can also find the number of shares outstanding in the financial statements that you downloaded in step 1)
4. Calculate Coca Cola's cost of equity capital using the CAPM, the risk-free rate you collected in step 2, and a market risk premium of 10%.
