Question
What is the most recent stock price listed for Dell? What is the market value of equity, or market capitalization? How many shares of stock
What is the most recent stock price listed for Dell? What is the market value of equity, or market capitalization? How many shares of stock does Dell have outstanding? What is the most recent annual dividend? Can you use the dividend discount model in this case? What is the beta for Dell? What is the yield on 3-month Treasury bills? Using the historical market risk premium, what is the cost of equity for Dell using the CAPM?
2. Stock price $50.72
Market value of equity- 36.525B
Shares outstanding - 171.91M
Annual Dividend - 0 Without the company paying dividends one should not use the discount dividend model.
Beta for Dell- 1.56 (My yahoo finance showed beta at 0 so I used a different site)
3m treasury Bills 2.139%
Cost of equity for Dell
Im getting this
=0.002139+(1.56*(-0.000259-0.002139))
with a negative cost of equity. I feel like this is wrong I am not sure if i calculated the historical market risk premium properly. Where is my error?
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