Questions:

Estimate capital structure:

1. Estimate the firm's weight of debt, preferred stock, and common stock using the firm's balance sheet( book value)

2. Estimate the firm's weight of debt, preferred stock, and common stock using the market value of each capital component

Compute weighted Average cost of capital (WACC)

Estimate the firm's before tax and after tax component cost of debt

EStimate the firm's component cost of preferred stock

Use three approaches (CAPM,DCF,bond-yield plus risk-premium) to estimate the component cost of common equity of the firm.

Calcualte the firm,s weighted avearge cost of capital (WACC)

Consolidated Financial Statement for 2013.
	Inventories
			2013
	Components		$	683
	Finished goods			1,081
	Total inventories		$	1,764
	Property, Plant and Equipment
			2013
	Land and buildings		$	3,309
	Machinery, equipment and internal-use software			21,242
	Leasehold improvements			3,968
	Gross property, plant and equipment			28,519
	Accumulated depreciation and amortization			(11,922
	Net property, plant and equipment		$	16,597
	Accrued Expenses
			2013
	Accrued warranty and related costs		$	2,967
	Accrued taxes			1,200
	Deferred margin on component sales			1,262
	Accrued marketing and selling expenses			1,291
	Accrued compensation and employee benefits			959
	Other current liabilities			6,177
	Total accrued expenses		$	13,856
	Non-Current Liabilities
			2013
	Deferred tax liabilities		$	16,489
	Other non-current liabilities			3,719
	Total other non-current liabilities		$	20,208
	Other Income and Expense
	The following table shows the detail of other income and expense for 2013, 2012 and 2011 (in millions):
			2013
	Interest and dividend income		$	1,616
	Interest expense			(136
	Other expense, net			(324
	Total other income/(expense), net		$	1,156
Consolidtaed statement of cash flow..
		Years ended
		2013
Cash and cash equivalents, beginning of the year		$	10,746
Operating activities:
Net income			37,037
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization			6,757
Share-based compensation expense			2,253
Deferred income tax expense			1,141
Changes in operating assets and liabilities:
Accounts receivable, net			-2,172
Inventories			-973
Vendor non-trade receivables			223
Other current and non-current assets			1,080
Accounts payable			2,340
Deferred revenue			1,459
Other current and non-current liabilities			4,521
Cash generated by operating activities			53,666
Investing activities:
Purchases of marketable securities			(148,489
Proceeds from maturities of marketable securities			20,317
Proceeds from sales of marketable securities			104,130
Payments made in connection with business acquisitions, net			(496
Payments for acquisition of property, plant and equipment			(8,165
Payments for acquisition of intangible assets			(911
Other			(160
Cash used in investing activities			(33,774
Financing activities:
Proceeds from issuance of common stock			530
Excess tax benefits from equity awards			701
Taxes paid related to net share settlement of equity awards			(1,082
Dividends and dividend equivalent rights paid			(10,564
Repurchase of common stock			(22,860
Proceeds from issuance of long-term debt, net			16,896
Cash generated by/(used in) financing activities			(16,379
Increase/(decrease) in cash and cash equivalents			3,513
Cash and cash equivalents, end of the year		$	14,259
Supplemental cash flow disclosure:
Cash paid for income taxes, net		$	9,128

	Consolidated Balance-sheet for 2013..
ASSETS:
Current assets:
Cash and cash equivalents		$	14,259			$	10,746
Short-term marketable securities			26,287				18,383
Accounts receivable, less allowances of $99 and $98, respectively			13,102				10,930
Inventories			1,764				791
Deferred tax assets			3,453				2,583
Vendor non-trade receivables			7,539				7,762
Other current assets			6,882				6,458
Total current assets			73,286				57,653
Long-term marketable securities			106,215				92,122
Property, plant and equipment, net			16,597				15,452
Goodwill			1,577				1,135
Acquired intangible assets, net			4,179				4,224
Other assets			5,146				5,478
Total assets		$	207,000			$	176,064
LIABILITIES AND SHAREHOLDERS