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Calculate the cost of capital for salesforce inc

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Reference no: EM132658995

Consider the following financial data.

US 10-Year T-Bond Yield = .63%

Market Risk Premium = 6.25%

Tax Rate = 21%

Also the following data for Salesforce, Inc. :

Stock Price = $249.21

Market Cap = $226.78 billion

Beta = 1.24

Moodys = A- (111 basis points)

Total Debt = $6.19 billion

Number of Shares Outstanding = 910 million

EPS = $2.59

Return on Assets = .93%

Total Debt/Equity = 16.10

Current Ratio = 1.14

Book Value/share = $42.33

Revenues =$19.38 billion

Price/Earning Multiple = 96.22

Problem 1: Calculate the Cost of Capital for Salesforce, Inc. Choose the best answer from the list below.

[A] 8.19%

[B] 8.38%

[C] 1.37%

[D] 1.74%

[E] 7.75%

Reference no: EM132658995

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