This report is written to calculate weighted Average cost of Capital for Google which is currently renamed as Alphabet inclusive. And its ticker symbol is Goog as found by our online quiz help experts online. The detailed analysis is covered in proceeding sections.

Discussion & Analysis

Cost of Equity Calculation

We will use CAPM model to calculate cost of equity. The detailed assumptions including calculation are discussed in proceeding sections.

Beta from Regression & Analysts

The beta for Goog is calculated by regressing last 1 year’s market return with S&P 500 return. The detailed data is shown in appendix 1. The beta from the above calculation and other two analysts are given below. We have taken Morningstar beta for our calculation for CAPM as it is calculated in the most scientific way using input from various stream from analysts.

Beta Types	Value	Source
Beta from Regression	1.40
Beta from Analyst	1.032	(Yahoo Finance)
Beta from Bloomberg	1.07	(Bloomberg)

Determination of Risk Free Rate

The risk free rate is taken as yield of 30 years treasury rate. We have taken 2.95% as risk free rate as shown in appendix 2.

Determination of Market Risk Premium

Market risk premium is calculated by deducting 30 years S&P 500 return with the risk free rate as per our online exam help experts. The 30 years S&P 500 return is attached in appendix 3. The Rm value is as given below:-

Risk Free Rate	2.95%	(30 years treasury Data)
Market Return (RM)	11.40%	(30 years S&P 500 returns)
Market Risk Premium	8.45%

Own-Bond-Yield-plus-Judgmental-Risk-Premium

The own bond yield plus judgmental risk premium is determined by adding 10 years bond yield data for Google as attached in appendix 4 with judgmental risk premium of 3% as given below:-

Bond Yield	2.75%	(10 years Bond)
Risk Premium	3%	(determine from Equity Risk premimum calculated by http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html
Equity Risk premium	5.75%

Cost of Preferred Stock

Google don’t have preferred stock as shown in appendix 5. It means there will be no consideration of cost of debt in calculation of WACC.

Cost & market Value of Debt

The market value of debt is calculated by taking information from various bond issuances as shown in appendix 4 using excel function PV. The detailed calculation is as given below. We use weighted average method to calculate cost of debt.

Cost of Debt

Bond Name	Amount	%ge	Cost	Years to Maturity	Coupon Rate	Market value
Google 0.01%	2000	0.381898033	0.97%	2	2%	2,007.22
Google 3.375%	2000	0.381898033	2.75%	9	3%	1,701.46
Google 0.01%	1237	0.236203934	2.32%	6	4%	1,171.90

Weighted Average cost	1.91%

Market Value of Equity

The market value of Equity is calculated by multiplying current stock price with total no. of shares outstanding as per explanation given by online test help experts. The detailed calculation is given below:-

Market value of Equity
No. of stocks outstanding	687.72
Current Market price	750.26
Market price of Equity	515968.8072

Debt, Equity weightage and WACC calculation

The debt and equity weightage is found by dividing market value of debt with sum of market value of both debt and equity. The WACC is then calculated by taking weighted average of both equity and debt costs with their weightage as shown below:-

Tax rate	34%
Market value of Assets	$520,849.39
Equity %ge	99.06%
Debt %ge	0.94%
WACC	11.89%

Appendix

Appendix 1:- Regression Data

			Return
Date	Google	S&P 500	Google	S&P 500
11/23/2015	750.26	2090.11	-0.84%	0.05%
11/16/2015	756.6	2089.17	5.52%	3.27%
11/9/2015	717	2023.04	-2.28%	-3.63%
11/2/2015	733.76	2099.2	3.23%	0.95%
10/26/2015	710.81	2079.36	1.25%	0.20%
10/19/2015	702	2075.15	6.01%	2.07%
10/12/2015	662.2	2033.11	2.89%	0.90%
10/5/2015	643.61	2014.89	2.66%	3.26%
9/28/2015	626.91	1951.36	2.44%	1.04%
9/21/2015	611.97	1931.34	-2.75%	-1.36%
9/14/2015	629.25	1958.03	0.56%	-0.15%
9/8/2015	625.77	1961.05	4.17%	2.07%
8/31/2015	600.7	1921.22	-4.71%	-3.40%
8/24/2015	630.38	1988.87	2.92%	0.91%
8/17/2015	612.48	1970.89	-6.79%	-5.77%
8/10/2015	657.12	2091.54	3.43%	0.67%
8/3/2015	635.3	2077.57	1.55%	-1.25%
7/27/2015	625.61	2103.84	0.33%	1.16%
7/20/2015	623.56	2079.65	-7.34%	-2.21%
7/13/2015	672.93	2126.64	26.94%	2.41%
7/6/2015	530.13	2076.62	1.29%	-0.01%
6/29/2015	523.4	2076.78	-1.56%	-1.18%
6/22/2015	531.69	2101.49	-0.93%	-0.40%
6/15/2015	536.69	2109.99	0.82%	0.76%
6/8/2015	532.33	2094.11	-0.19%	0.06%
6/1/2015	533.33	2092.83	0.23%	-0.69%
5/26/2015	532.11	2107.39	-1.48%	-0.88%
5/18/2015	540.11	2126.06	1.17%	0.16%
5/11/2015	533.85	2122.73	-0.81%	0.31%
5/4/2015	538.22	2116.1	0.06%	0.37%
4/27/2015	537.9	2108.29	-4.81%	-0.44%
4/20/2015	565.0626	2117.69	7.83%	1.75%
4/13/2015	524.0524	2081.18	-2.96%	-0.99%
4/6/2015	540.0125	2102.06	0.84%	1.70%
3/30/2015	535.5325	2066.96	-2.34%	0.29%
3/23/2015	548.3425	2061.02	-2.15%	-2.23%
3/16/2015	560.3625	2108.1	2.38%	2.66%
3/9/2015	547.3225	2053.4	-3.59%	-0.86%
3/2/2015	567.6876	2071.26	1.66%	-1.58%
2/23/2015	558.4026	2104.5	3.61%	-0.27%
2/17/2015	538.9525	2110.3	-1.83%	0.63%
2/9/2015	549.0125	2096.99	3.39%	2.02%
2/2/2015	531.0024	2055.47	-0.66%	3.03%
1/26/2015	534.5225	1994.99	-1.01%	-2.77%
1/20/2015	539.9525	2051.82	6.27%	1.60%
1/12/2015	508.0823	2019.42	2.40%	-1.24%
1/5/2015	496.1723	2044.81	-5.46%	-0.65%
12/29/2014	524.8124	2058.2	-1.73%	-1.46%
12/22/2014	534.0325	2088.77	3.42%	0.88%
12/15/2014	516.3523	2070.65	-0.45%	3.41%
12/8/2014	518.6623	2002.33	-1.26%	-3.52%