Question
Apple Inc. (AAPL) is a consumer electronics company with 3.95B shares outstanding cur- rently trading at $177.06 per share. They also have 118m annual coupon
Apple Inc. (AAPL) is a consumer electronics company with 3.95B shares outstanding cur- rently trading at $177.06 per share. They also have 118m annual coupon bonds selling in the market for $101.37 each and a coupon rate of 4%. They mature in 10 years. Assume Apple will maintain their current capital structure. They are interested in fabricating their own chips for their Mac computer line. While Apple has an equity beta of 1.01, Intel (INTC), a computer chip fabricator, has an equity beta of 0.62. INTC has a debt to value ratio of 31% and has a similar cost of debt as AAPL. The risk free rate is 1.9%, the expected market return is 6.8%, and the corporate tax rate is 35% for all firms. You can assume the cost of debt stays constant in the future. What is Apples weighted average cost of capital (WACC) for this project (answer in decimal, not percent)?
I have the answers I just don't understand how you get the d/e for the Re of apple
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