Apple Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands and par value)

September 29, 2018September 30, 2017

ASSETS:

Current assets:

Cash and cash equivalents$ 25,913$20,289

Marketable securities 40,388 53,892

Accounts receivable, net 23,186 17,874

Inventories 3,956 4,855

Vendor non-trade receivables 25,809 17,799

Other current assets 12,08713,936

Total current assets 131,339128,645

Non-current assets:

Marketable securities 170,799 194,714

Property, plant and equipment, net41,304 33,783

Other non-current assets 22,283 18,177

Total non-current assets 234,386 246,674

Total assets$ 365,725 $ 375,319

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:

Accounts payable $ 55,888 $ 44,242

Other current liabilities 32,687 30,551

Deferred revenue 7,543 7,548

Commercial paper11,964 11,977

Term debt 8,7846,496

Total current liabilities 116,866 100,814

Non-current liabilities:

Deferred revenue 2,797 2,836

Term debt 93,735 97,207

Other non-current liabilities 45,18040,415

Total non-current liabilities 141,712 140,458

Total liabilities 258,578 241,272

Commitments and contingencies

Shareholders' equity:

Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares

authorized; 4,754,986 and 5,126,201 shares issued and outstanding, respectively 40,201 35,867

Retained earnings 70,400 98,330

Accumulated other comprehensive income/(loss)(3,454)(150)

Total shareholders' equity 107,147 134,047

Total liabilities and shareholders' equity$ 365,725 $ 375,319

Apple Inc. Common Stock (AAPL) Quote & Summary Data

The current stock price:$266.5601

Shares Outstanding:4,519,180,000

Coupon in %3.0000%Yield in %2.30%

• Determine Apple Inc. cost of equity:

• Determine Apple Inc. required rate of return using the CAPM.

• What is the approach and procedure used (and justification for the sources of inputs used for the model) to make the determination and the meaning of this required rate of return?