Consider two companies: United States steel (X) and Facebook (FB). Look at the profiles (financial statements...

50.1K

Verified Solution

Question

Finance

Consider two companies: United States steel (X) and Facebook(FB). Look at the profiles (financial statements for 2016) of eachon yahoo finance and discuss the followings (you need to calculatethese values yourself and show details of your calculations): Howmany outstanding shares the company has? What is the market valueof the company? What is the book value of the company? What is thebeta for the company? How do you find the risk free rate? (considerthe market risk premium to be 8%) Using CAPM calculate the expectedreturn on the equity for the company. (To get the required rate ofreturn on debt, divide the interest expense by total debt) (To getthe total debt, add the short term debt to long term debt) What isthe Weighted average cost of capital (WACC) for the company? Whatis the leverage (total debt/equity ratio) for the company?

Answer & Explanation Solved by verified expert

3.5 Ratings (440 Votes)

Solutions All these figures are considered and taken as on31122018 1 Outstanding shares of United States Steel 177386430Outstanding shares of Facebook See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Consider two companies: United States steel (X) and Facebook(FB). Look at the profiles (financial statements for 2016) of eachon yahoo finance and discuss the followings (you need to calculatethese values yourself and show details of your calculations): Howmany outstanding shares the company has? What is the market valueof the company? What is the book value of the company? What is thebeta for the company? How do you find the risk free rate? (considerthe market risk premium to be 8%) Using CAPM calculate the expectedreturn on the equity for the company. (To get the required rate ofreturn on debt, divide the interest expense by total debt) (To getthe total debt, add the short term debt to long term debt) What isthe Weighted average cost of capital (WACC) for the company? Whatis the leverage (total debt/equity ratio) for the company?