Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

what is B? Score: 0 of 2 pts 14 of 16 (13 completel HW Score: 80.77%, 21 of 26 pts Problem 12-24 Question Help Your

what is B? image text in transcribed
Score: 0 of 2 pts 14 of 16 (13 completel HW Score: 80.77%, 21 of 26 pts Problem 12-24 Question Help 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 Dell Computer is very similar to your computer division, in terms of both risk and financing You go online and find the following information Dolls bota is 1.16, the risk free rate is 4.5%, its Market value of equity is $86.7 bilion, and has $703 million worth of debt with a yield to maturity of 5.6% Your tax rate is 35% and you use a market risk premium of 5.9% in your WACC olmas a. What is an estimate of WACC for your computer sales division If your event company WACCI 12 and 11e comer en division represents 25% of the value of your fem. what is an estimate of the way for your software division? Now Asume the firm will always be able to tra finore tax shield What is an estimate of the WACC for your computer sales division? The wend worage cost of capital for your computer sales choision in 11.28% (Round to no decimal places) b. ll your everal company WACC # 12.9% and the computer sales division represents 35% of the value of your firm, what is an estimate of the WACC for your software division? The WACC for your software divinion : 1. Round to two decimalt place.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Micro Entrepreneurship And Micro Enterprise Development In Malaysia Emerging Research And Opportunities

Authors: Abdullah Al Mamun , Mohammad Nurul Huda Mazumder, Noor Raihani Zainol, Rajennd Muniady

1st Edition

1522584730,1522584757

More Books

Students also viewed these Finance questions