Telecommunications
COST OF CAPITAL STUDY YIELD CAPITALIZATION 2021 ASSESSMENT YEAR APPENDIX C TELECOMMUNICATIONS EQUITY RATE 8.50% CAPITAL ASSET PRICING MODEL PAGE CAPM Ex Ante 5.1% 6 DIVIDEND GROWTH MODELS Value Line, based on Dividends Growth 8.50% 7 Value Line, based on Earnings Growth 8.50% 8 Value Line, based on Return on Equity 8.50% 10 RANGE 5-8.5% DEBT RATE 3.50% 11 SECURED DEBT (LEASE) RATE 2.50% 11 MARKET CAPITAL STRUCTURE Equity 60% x 8.50% = 5.10% 3 Debt 40% x 3.50% = 1.40% 3 Marginal Tax Rate 24% = (1-.024) x 1.40% 1.06% WEIGHTED AVERAGE COST OF CAPITAL 6.2% rounded 1 SUPPORT FOR GUIDELINE COMPANIES WASHINGTON STATE DEPARTMENT OF REVENUE 2021 ASSESSMENT YEAR TELECOMMUNICATIONS Capital Structure at Book Value Fin'l Price Growth Earnings P/E Company Ticker Beta Div'd Yield Common Stock % Preferred Stock % Long Term Debt % Total Debt & Equity Strength Stability Persist Predict Ratio AT&T Inc t 0.85 A++ 100 15 100 8.8 7.40% 179,218,900,000 53.3% - 0.0% 157,245,000,000 46.7% 336,463,900,000 ATN International Inc atni 0.75 B++ 45 40 30 nmf 1.40% 645,637,151 89.9% - 0.0% 72,800,000 10.1% 718,437,151 BCE Inc bce 0.90 B++ 100 10 95 19.3 6.10% 15,988,024,000 47.5% 1,542,000,000 4.6% 16,098,039,216 47.9% 33,628,063,216 Charter chtr 0.90 B++ 85 95 10 40.1 nil 23,805,664,420 22.3% 0.0% 82,752,000,000 77.7% 106,557,664,420 Lumen Technologies Inclumn 1.00 B 50 5 70 7.5 8.00% 11,138,400,000 25.9% - 0.0% 31,837,000,000 74.1% 42,975,400,000 Cincinnati Bell Inc cbb 0.90 C+ 15 15 10 nmf nil nmf Comcast Corp cmcsa 0.80 A+ 100 90 100 20.9 1.80% 90,330,539,712 46.5%
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