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Book based examples are so pretty and clean

Finance

Book based examples are so pretty and clean. But I have been telling you that the real world is messy.
Lets see just how messy. On Canvas is an excel spreadsheet giving you a lot of information (you’re
welcome for cleaning it for you already – life is actually even messier than this!). Here is what it
contains:
1, 3, and 5 year Betas for Tesla from 2011-2021
1, 3 and 5 years Betas for the Car Manufacturing Industry from 2011 to 2021
S&P 1, 5, 10, 20, 25, 30, 40, and 50 year average returns for 2011-2021
Treasury yield curves from 2011 to 2022
Tesla’s interest expense, total debt, tax rates and pre-tax cost of debt for 2011-2021
Tesla’s market capitalization from 2011 – 2022
Using this data calculate the WACC for Tesla for 2011, 2013, 2015, 2017, 2019 and 2021. And put it into
a table. Cut and Paste the formatted table into Word and then State and JUSTIFY your choices of inputs
– this will require critical thinking and extrapolation.
Second – try to make the WACC for 2021 as high and as low as you can make it.... Try to justify these
assumptions...
Finally... What has this exercise taught you about WACCs in the “real world” – is Finance a science or an
art? Explain.

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