Aswath Damodaran 148
Disney’s Cost of Equity
Business Unlevered Beta
D/E
Ratio
Levered
Beta
Cost of
Equity
Media Networks 1. 0850 26. 62 % 1. 2661 10. 10 %
Parks and
Resorts 0. 9105 26. 62 % 1. 0625 9. 12 %
Studio
Entertainment 1. 1435 26. 62 % 1. 3344 10. 43 %
Consumer
Products 1. 1353 26. 62 % 1. 3248 10. 39 %
Disney 1. 0674 26. 62 % 1. 2456 10. 00 %
We are using Disney’s debt to equity ratio as the debt to equity ratio for each of
its divisions since the divisision don’t carry their own debt. Optimally, you
would like to break the debt down by division, estimate a value of equity for
each division and come up with a debt to equity ratio for each division.
