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 $1\mathrm{.}16,$ the risk$-$free rate is $4\mathrm{.}1\%,$ its market value of equity is $$65\mathrm{.}5$ billion, and it has $$691$ million

worth of debt with a yield to maturity of $5\mathrm{.}7\%.$ Your tax rate is $38\%$ and you use a market risk premium of $5\mathrm{.}6\%$ in your WACC estimates.

a$.$ What is an estimate of the WACC for your computer sales division?

b$.$ If your overall company WACC is $12\mathrm{.}7\%$ and the computer sales division represents $43\%$ of the value of your firm, what is an estimate of the

WACC for your software division?

a$.$ What is an estimate of the WACC for your computer sales division?

The weighted average cost of capital for your computer sales division is

$\%.($Round to two decimal places.$)$