Financial excecutive needed to calculate Weighted Average Cost of Capital (WACC) for a toys company based in Argentina selling primary to local market (exports to LatAm are only 10% of revenues)
Should arrive to WACC calculation estimating first the Costs of Equity and providing supporting evidence for everyone of its components using the CAPM:
. Risk free rate: usually T-Bills US
. Beta: researching comparable companys. i.e.: MAT, HAS, JAKK, KID, and the like
. Market risk premium: usually set to 7,8% (arithmetic average)
. Country risk premium: could research Argentina's CDS
. Also, please provide the market D/(D+E) ratio according to comparable companies.
Please focus on Beta and Country risk estimation. Risk free rate and Market risk premium are not important as the are standard and very estable.
Refer to attachment for further details.