1. Using the website www.sec.gov.and the most recent 10K SEC filings made by Dell Computer( DELL), and looking at the balance sheet, what is the book value of debt and the book value of equity. Is this the actual cost of capital for Dell Computer?
 
2. Estimate Dell's equity cost, using finance. yahoo.com and entering the ticker symbol DELL. 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 forward annual dividend? What is the estimated growth rate for dividends? What is the cost of equity for DELL using the DOM? What is the beta for DELL? Using finance.yahoo.com and and following the "Bonds" link, what is the yield on three-month Treasury bills? Using the historical market risk premium, what is the cost of equity for DELL using CAPM? What is the final estimate for the cost of equity?
 
3. Calculate the cost of debt for DEL Losing finra-markets.morningstar.com, by entering DELL as the company, what is the yield to maturity for each of DELL's bonds. What is the weighted average cost of debt for DELL using the book value weights and the market value weights? Does it make a difference in this case if book value weights or market value weights is used? Having all the necessary information to calculate DELL's weighted average cost of capital, calculate the WACC using book value weights and market value weights. What is Dell's tax rate and which number is more relevant? using Dell as a pure-play company to estimate the cost of capital. Are there any potential problems with this approach in this situation?

Answer rating: 100% (QA)

To find the book value of debt and equity for Dell Computer DELL we need to look at its most recent ... View the full answer