Determine and estimate wacc for coca-cola amatil ltd

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Reference no: EM132470247

Estimate WACC for Coca-Cola Amatil Ltd, (Ticker code - CCL:AU), at ending 31 Dec 12. Will need financial data from CCA website. Consider sources like: ‘The Bulletin'

Statistical Tables F2 (daily) and F3 available through RBA website, Bloomberg and Yahoo Finance. Use 31 December 2012 or June averages as appropriate. Coca-Cola Amatil Ltd uses a number of sources of debt and equity. You can make the following assumptions:

Point 1: Non-current ‘interest-bearing' borrowings on the CCL Balance Sheet (in their annual report) reflect market value.

Point 2: An average yield on corporate bonds with a ‘BBB' rating can be used in this analysis (see RBA Table F3).

Point 3: Coca-Cola Amatil has no preference shares issued.

Point 4: The CAPM is used to estimate the cost of ordinary equity.

Point 5: The 10-year Australian Treasury bond rate is an appropriate proxy for the risk-free rate (see RBA Table F2 - Daily).

Point 6: The beta for Coca-Cola Amatil has not varied significantly in the past 5 years and is not expected to change in the near future (see Reuters).

Point 7: Coca-Cola Amatil's closing share price as at 31 December 2012 should be considered in the analysis (see Yahoo Finance).

Point 8: The market risk premium (also called equity risk premium) is 7%.

Point 9: Coca-Cola Amatil calculates its WACC assuming a classical tax system.

Point 10: The company's tax rate is 30%.

Question 1: Ensure that you set out full workings in a clear and logical fashion. Label all input figures, state any assumptions necessary for their use, and reference their source.

Reference no: EM132470247

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