Estimating the cost of Capital: 1. Compute the weights for Disney’s equity and debt based on the market value of equity and Disney’s market value of debt, computed – see details sheet.,2. Calculate Disney’s cost of equity capital using the CAPM, the risk-free rate of 1.60, and a market risk premium of 5%.,3. Assuming that Disney has a tax rate of 35%, calculate its after-tax debt cost of capital,4. Calculate Disney’s WACC.,5. Calculate Disney’s net debt by subtracting its cash (3.39B) from its debt. Recalculate the weights for the WACC using the market value of equity, net debt, and enterprise,
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