Find 2017 financial statements for Costco from Yahoo! Finance.
(1) Evaluate the company’s financial situation (e.g., liquidity, leverage, profitability).
(2) Estimate the weights of capital (debt, preferred stock, and common stock) for the company.
(3) Estimate the before-tax and after-tax component cost of debt for the firm.
(4) Estimate the component cost of preferred stock (if applicable) for the firm.
(5) Estimate the component cost of common equity using CAPM for the firm.
(6) Compute the firm’s weighted average cost of capital (WACC). Discuss your findings.