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Your company has two divisions: One division sells software and the other division sells computers through a direct sales channel, primarily taking orders over the

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Your company has two divisions: One division sells software and the other division sells 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: Dell's beta is 1.24, the risk-free rate is 4.1%, its market value of equity is 67.5 billion, and it has $699 million worth of debt with a yield to maturity of 5.8%. Your tax rate is 38% and you use a market risk premium of 5.6% in your WACC estimates. Please select all the choices that are true. The return on equity for Dell using the CAPM model is 11.04%. The return on equity for Dell using the CAPM model is 13%. The weighted average cost of capital is 10.96%. The weighted average cost of capital is 12.80%

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