The financial market changes everyday so your answer will be different depending on which day your collect data. So it is important for your to show me the data collection by taking screen shots. ...

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The financial market changes everyday so your answer will be different depending on which day your collect data. So it is important for your to show me the data collection by taking screen shots.



Step 1: Collect information on risk free rate


Please take screens shot and insert the picture here and show your choice for risk free rate.



Step 2: Collect financial data of Microsoft from finance.yahoo.com


Please take screens shot and insert the pictures here.



Step 3: Collect MSFT’s bond yield information from




https://finra-markets.morningstar.com/BondCenter/Default.jsp


and calculate MSFT cost of debt.


Please take screen shots and insert your screen shots here. Please note that MSFT doesn’t have a bond maturing in 2030. So you can take the average of the yields of the MSFT bond MSFT4211185 maturing 2025 and MSFT4211189 maturing in 2035. This process is called linear interpolation of bond yield. You don’t have to but if you are interested in this process, you can read the following article:



https://www.isda.org/a/hKiDE/linear-interpolation-example.pdf




Step 4: Using CAPM to calculate MSFT’s cost of equity (Please use S&P 500 excess return versus 10 Year Treasury yield from 1926 to 2015 as Market risk premium in Slide 46 of the PowerPoint lecture).






Step 5: Calculate MSFT’s WACC



Answered Same DayNov 27, 2021

Answer To: The financial market changes everyday so your answer will be different depending on which day your...

Rochak answered on Nov 27 2021
128 Votes
Risk Free Rate = 1.48%
The risk free rate used is the yield on the 10-year treasury yield, because
that is the standard risk free rate which is used for calculation purposes.
Financial Data of Microsoft
Tax Rate = 21%
Beta = 0.86
Total Debt = 67,775,000,000
Market Capitalization (as on 26 November 2021) =...
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