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Raytheon Company

Module 6. Raytheon Company. Tyler Saucedo. “Customer success is our mission” Integrated Defense Systems Intelligence, Information and Services Missile Systems Space and Airborne Systems. Weighted Average Cost of Capital= r ent V ent =V D +V EQ

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Raytheon Company

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  1. Module 6 Raytheon Company Tyler Saucedo

  2. “Customer success is our mission” Integrated Defense Systems Intelligence, Information and Services Missile Systems Space and Airborne Systems

  3. Weighted Average Cost of Capital= rent Vent=VD+VEQ rent= rD x VD/ VENT + rEQ x VEQ / VENT Cost of Enterprise Capital

  4. rEQ= rrf + [β x (rmkt – rrf) ] Risk-free rate of 30 yr T-Bill = 3.96% Beta = Bloomberg Estimate = 0.895 Rate of return on Market = 10.96% (Assuming market premium of 7%) rEQ= 10.23% Cost of Equity Capital Using CAPM

  5. google.com 0.86 Nasdaq.com 1.03 Reuters.com 0.69 Finance.yahoo.com 0.70 Firstrade.com 0.73 Data.cnbc.com 0.69 Beta estimates

  6. rD= Return on NFL = FEAT/avg(NFL) Average: 1.84% Cost of Debt Capital

  7. rD= Pretax borrowing rate for debt * (1- tax rate) Interest Expense/ Average amount of debt = 210/7085 *(1-.37) = 1.86% Use disclosed intserest rate = 4.372% *(1-.37) = 2.73 % Use 1.84% Cost of Debt Capital Alternatives

  8. rent= [rDx VD/ VENT] + [rEQx VEQ / VENT] VD = BV NFL = $4,976 million VEQ = shares outstanding * price = 315 * 90.70 = $28,571 million rent = 8.98% Cost of Enterprise Capital

  9. Questions

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