Corporate Finance: Instructor\'s Manual Applied Corporate Finance

Aswath Damodaran 494

Reviewing Disney’s Costs of Equity & Debt

! Disney’s Cost of Debt (based upon rating) = 5. 25 %

! Disney’s tax rate = 37. 3 %

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 %

This is a reproduction of a page that we used to estimate costs of capital for

Disney divisions as part of the investment analysis section.