Week 5 Project – Company Stock and Cost of Capital AnalysisAssignment should be written on StarbucksIn this assignment you willPerform a detailed stock price analysis on your company’s stock (Starbucks), andCalculate and analyze the company’s (Starbucks) Weighted Average Cost of Capital (WACC)Stock Price Analysis:Monthly Stock Price Analysis:In Yahoo! Finance go to the Historical Prices page and import into Excel the last 5 years of monthly stock prices (use the ending date as of the end of the previous month). For the below activities use the adjusting closed price (“Adj Close”)What is the current stock price? What were the highest and lowest stock price values during this period?For the remaining items in this section you will analyze the Year-Over-Year returns. In your spreadsheet, calculate the Year-Over-Year (YoY) return for each month. (Please submit this worksheet in Excel with your written paper.) The calculation for this is: (month – same month prior year) / (same month prior year)What were the highest and lowest YoY returns during this period?Calculate the mean or average of these YoY returns from your sample.Calculate the standard deviation of the YoY returns. (In Excel, use the STDEV function.)Graphical View of Variability:In Yahoo! Finance go to the Basic Chart for your company. Select the 5 year (“5Y”) Range of the chart. In the Compare line select the S&P 500 and then press the “Compare” button.Copy and paste this chart into this section of your paper.Interpret your observations. Does the general movement of your company’s returns follow that of the S&P 500? Is the company’s stock price today higher than the company’s stock price at the beginning of this 5 year period?Analysis of WACCCalculation of WACC for your companyYou will need to identify each component of the WACC formula and calculate the overall WACC.The WACC formula for a company that uses debt and equity is as follows:WACC = % Debt * Cost of Debt * (1 – Tax Rate) + % Equity * Cost of EquityYou should use Yahoo! Finance and / or the company’s most recent 10K report to identify all financial statement inputs. You can use the following guide for the inputs. The specific financial statement data are found on the relevant financial statement.Debt = Long-term Debt + Short-term Debt (on Yahoo! this is called, “Short/Current Long Term Debt”)Equity = Market Cap. (This is on the Key Statistics page in Yahoo! Finance)% Debt = Debt / (Debt + Equity)% Equity = 1 – % DebtCost of Debt = Interest Expense / DebtTax Rate = Income Tax Expense / Income Before TaxCost of Equity: Use the CAPM equation to calculate thisCost of Equity = Risk free rate + Beta * (Market Risk Premium)Risk free rate: look up the yield on 10 year US Treasury bondsBeta: This is on the Key Statistics page in Yahoo! FinanceMarket Risk Premium: Assume 11% minus the risk-free rateInterpretation of WACC for Your CompanyIndicate what the WACC value you derived means for your company. What role does the WACC play for company managers when they are evaluating new projects to undertake? How would company managers and investors use the WACC for an overall company valuation analysis?Paper MechanicsPlease complete your work in Excel. For the calculation section of the assignment, each parameter, its data and the corresponding calculations should be clearly indicated and easy to follow. Your spreadsheet should be professional in its presentation with appropriate formatting and organization. Points will be taken off the final grade for these errors and omissions at your instructor’s discretion.Please read the rubric below before starting the assignment.TaskPoints AvailablePoints AwardedStock Price Analysisa. Monthly Stock Price Analysisb. Graphical View of Variability0-25Calculation of WACC:a. Debt componentb. Equity componentc. Overall WACCd. Interpretation of WACC for your company0-25Total0-50Less points for spelling, grammar, punctuation, and citation errors (APA)Less points for late/incomplete workNew TotalSubmit your completed assignment to the drop box below. Please check the Course Calendarfor specific due dates.Assignment should be written on StarbucksIn this assignment you willThe WACC formula for a company that uses debt and equity is as follows:WACC = % Debt * Cost of Debt * (1 – Tax Rate) + % Equity * Cost of EquityCost of Equity = Risk free rate + Beta * (Market Risk Premium)Please read the rubric below before starting the assignment.TaskPoints AvailablePoints Awarded0-250-25Total0-50Less points for spelling, grammar, punctuation, and citation errors (APA)Less points for late/incomplete workNew TotalSubmit your completed assignment to the drop box below. Please check the Course Calendarfor specific due dates.