Running head: WACC ANALYSIS 1

WACC Analysis of Eli Lilly

Imran Zulfiqar

Hamdard University of Management Sciences

Strategic Finance, FIN 711

Assistant Professor Aun Ali

Spring, 2017
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Table of Contents

Page No.

1. Abstract
2. Introduction
3. Definition of WACC
4. Cost of Debt
5. Cost of Equity Using Dividend Growth Model
6. Cost of Equity Using CAPM Model
7. WACC of Eli Lilly
8. Conclusion
9. References

Abstract

A Fortune 500 Corporation, Eli Lilly has revenues of 21.22B $ making it the 141th

largest company in the United States. and the 10th largest corporation by global pharmaceutical

sales. The company is publicly traded on the New York Stock exchange and is a member of the
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S&P 500 stock index. According to Forbes, Lilly ranked as the 243rd largest public company in

the world in 2016, with sales of US$20 billion and a market value of $86.43 billion. The

significance and convenience of weighted average cost of capital (WACC) as a financial tool for

both investors and organizations is all around acknowledged among the financial analysts.

Currently, WACC of Eli Lilly was calculated with the help of cost of Debt, cost of Equity using

average of two approaches: Dividend Growth Model and Capital Assets Pricing Model,

corporate tax rate,