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need a and b please P 13-24 Updated (book/static) Question Help o Your company has two divisions. One division sells software and the other division
need a and b please
P 13-24 Updated (book/static) Question Help o Your company has two divisions. One division sells software and the other division sets computers through a direct sales channel, primarily taking orders over the internet. You have decided that Del Computer is very similar to your computer division, in terms of both risk and financing You go online and find the following information Der's beta la 121, the risk the rate is 45% ts market value of equity is 5670 billion and has 5700 milion worth of debt with yield to maturity of 60%. Your tax rate is 25% and you use a market risk premium of 5.0% in your WAOC estimates a. What is an estimate of the WACC for your computer sales division? b. If your overall company WACC is 120% and the computer sales division represents 40% 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 its worst tax shield a. What is an estimate of the WACC for your computer sales division? The weighted average cost of capital for your computer sales division la Round to two decimal places) Step by Step Solution
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