Consider two companies: United States Steel (X) and Facebook (FB).
Look at the profiles (financial statements for 2016) of each on yahoo finance and discuss the followings (you need to calculate these values yourself and show details of your calculations):
a) How many outstanding shares does the company have?
b) What is the market value of the company?
c) What is the book value of the company?
d) What is the beta for the company?
e) How do you find the risk free rate?
f) (consider the market risk premium to be 8%)
g) Using CAPM to calculate the expected return on the equity for the company.
h) (To get the required rate of return on debt, divide the interest expense by total debt)
i) (To get the total debt, add the short term debt to long term debt)
j) What is the Weighted average cost of capital (WACC) for the company?
k) What is the leverage (total debt/equity ratio) for the company?
Provide your explanations and definitions in detail and be precise. Provide references when necessary. Explain in your own words. Support your statements with peer-reviewed in-text citation(s) and reference(s).
4- 6 pages with minimum of 6 peered reviewed citations