3) Determine HP's weighted average cost of capital (WACC). The CFO of the company computes HP's cost of debt by dividing the yearly interest expenses by the total outstanding long-term debt of the company, and she estimates the firm's cost of equity using the CAPM. Your team will have to follow this method.
Period Ending: 31/10 31/10 31/10 31/10 Total Revenue . 55639 58756 58472 52056 Revenue 58639 58756 58472 52056 Other Revenue, Total Cost of Revenue, Total 48202 47586 47803 42478 Gross Profit 10-437 11170 10669 9578 Total Operating Expenses 53217 54879 54767 48688 Selling General/Admin. Expenses, Total 4906 5368 5:099 4532 Research & Development 1478 1499 1404 1190 Depreciation / Amortization 113 118 1 Interest Expense (Income) - Net Operating Unusual Expense (Income) 518 310 Other Operating Expenses, Tolal Operating Income 3-422 3877 3705 3358 Interest Income (Expense], Net Non-Operating -239 -347 -205 -338 Gain (Loss) on Sale of Assets Other, Net 1007 -405 246 Net Income Before Taxes 3231 2523 3013 3276 Provision for Income Taxes 387 551 150 750 Net Income After Taxes 2844 3074 2863 2526 Minority Interest Equity In Affiliates U.S GAAP Adjustment Net Income Before Extraordinary Hems 2844 3074 2061 2526 Total Extraordinary Items 78 2404 Net Income 2844 3152 5327 2526 Total Adjustments to Net Income Income Available to Common Excluding 2844 3074 2063 2526 Extraordinary Items Dilution Adjustment Diluted Net Income 2844 3152 5327 2526 Diluted Weighted Average Shares 1420 1524 1634 1702 Diluted EPS Excluding Extraordinary Items 2.02 1.75 148 DPS - Common Stock Primary Issue 0.7 0.64 0.56 0.53 Diluted Normalized EPS 232 2.15 1.97 1,7Total Current Assets ~ 20648 20177 21387 22318 Cash and Short Term Investments 5138 4537 5877 8146 Cash Cash & Equivalents 4864 4537 5166 6997 Short Term Investments 274 711 1149 Total Receivables, Net 8443 8939 8003 7162 Accounts Receivables - Trade, Net 5381 6031 5113 4414 Total Inventory 5963 5734 6062 5786 Propaid Expenses 1104 Other Current Assets, Total 4440 967 1445 1224 Total Assets ~ 34681 33467 34622 32913 Property/Plant/Equipment, Total - Net 3734 2794 2198 1878 Property/Plant/Equipment, Total - Gross 8448 7037 6109 5958 Accumulated Depreciation, Total -4714 -4247 -3911 -4080 Goodwill Net 6380 6372 5968 5822 Intangibles, Net 540 651 Long Term Investments 107 Note Receivable - Long Term 953 1695 Other Long Term Assets, Total 3379 3319 4027 ZDEL Other Assets, Total Total Current Liabilities 26220 25293 25131 22412 Accounts Payable 14704 14793 14816 13279 Payable/Accrued Accrued Expenses 9411 8590 7207 6575 Notes Payable/Short Term Debt 41 50 898 976 Current Port. of LT Debt/ Capital Leases 633 307 565 96 Other Current liabilities, Total 1431 1553 1555 1480 Total Liabilities 38909 34560 35261 36321 Total Long Term Debt 5543 4780 4524 6747 Long Term Debt 5543 4780 4524 8747 Capital Lease Obligations Deferred Income Tax 25 100 1410 Minority Interest Other Liabilities, Total 5121 4527 5506 5752 Total Equity -2228 -1193 639 -3408 Redeemable Preferred Stock, Total Preferred Stock - Non Redeemable, Net Common Stock, Total 13 15 16 16 Additional Paid-In Capital 963 235 6 63 380 Retained Earnings (Accumulated Deficit) -1961 -818 473 -2380 Treasury Stock - Common ESOP Debt Guarantee Unrealized Gain (Loss) 11 12 Other Equity, Total -1254 -1234 .850 -1430 Total Liabilities & Shareholders' Equity 34681 33467 34622 32913 Total Common Shares Outstanding 1304 1458 1560.27 1649.58 Total Preferred Shares Outstanding2020 2019 2018 2017 Period Ending: 31/10 31/10 31/10 31/10 Period Length 12 Months 12 Months 12 Months 12 Months Net Income Starting Line 2840 3152 5327 2526 Cash From Operating Activities ~ 4316 4654 4520 3677 Depreciation/Depletion 789 744 528 354 Amortization Deferred Taxes 70 133 238 Non-Cash Items 1279 B25 719 720 Cash Receipts Cash Payments Cash Taxes Paid 484 951 438 Cash Interest Paid 227 240 322 Changes in Working Capital 201 1607 Cash From Investing Activities * -1016 -430 716 -1717 Capital Expenditures -580 -671 -546 -402 Other Investing Cash Flow Items, Total -438 233 -170 -1315 Cash From Financing Activities ~ -2973 48-45 -56-13 -1251 Financing Cash Flow Iterms -129 -61 52 40 Total Cash Dividends Paid -897 -970 894 Issuance (Retirement) of Stock, Net -3107 -2405 -2557 -1412 Issuance (Retirement) of Debt, Net 1259 -1409 -2239 1007 Foreign Exchange Efects Net Change in Cash 327 -629 -1831 TOE Beginning Cash Balance 5166 6997 5286 Ending Cash Balance 4537 5168 8997 Free Cash Flow 3083 3275 From Cash Flow Growth Free Cash Flow Yield
