User Account

All Pages

Estimate of the wacc for your computer sales? division

Assignment Help Finance Basics
Reference no: EM132678787

Your company has two? divisions: One division sells software and the other division sells computers through a direct sales? channel, primarily taking orders over the internet. You have decided that Dell Computer is very similar to your computer? division, in terms of both risk and financing. You go online and find the following? information: Dell's beta is 1.18?, the? risk-free rate is 4.9%?, its market value of equity is $65.2 ?billion, and it has $692 million worth of debt with a yield to maturity of 5.9%. Your tax rate is 38% and you use a market risk premium of 5.6% in your WACC estimates.

a. What is an estimate of the WACC for your computer sales? division?

b. If your overall company WACC is 11.5% and the computer sales division represents 41% of the value of your? firm, what is an estimate of the WACC for your software? division?

?Note: Assume that the firm will always be able to utilize its full interest tax shield.

Reference no: EM132678787

Questions Cloud

Public policy process in local government : Which outlines a public policy process in your local government or state. Describe the causes of the policy.
Create a website that has some dynamic and static content : Create a website that has some dynamic and static content using word press. The website needs to be created on localhost phpmyadmin/word press.
Calculate the amount of insurance peter needs to purchase : Assuming that Peter's wife can invest the insurance proceeds at 8%, calculate the amount of insurance Peter needs to purchase.
What is the risk premium of stock a : What is the risk premium of Stock A? Stock A has an expected return of 15% and a Beta of 1.2. Stock B has an expected return of 20% and a Beta of 2.0.
Estimate of the wacc for your computer sales? division : a. What is an estimate of the WACC for your computer sales? division?
How erm can be integrated with organization overall strategy : The reading this week discusses strategy and how ERM can be integrated with an organization's overall strategy. Prepare a research paper on some of the various.
What is sonny depreciation deduction : Assuming Sonny does not elect Sec. 179 expensing and elects out of bonus? depreciation, what is Sonny?'s depreciation deduction in 2020??
The american constitution : How does the right to privacy protect a women's right to have an abortion or not?
Introductory work on international organizations : Which quotes Diehl's (2005) introductory work on international organizations (IOs), and after completing the first readings,

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd