Based on the WACC and OCS information below should Amazon.com, Inc. take on more debt, repurchase stock, have a seasoned equity offering? Justify your answers
Input Data (Millions Except Per Share Data)
Tax rate			30.79%
Debt (D)			$3,457.00
Number of shares (n)			290
Stock price per share (P)			$71.91
Capital Structure (Millions Except Per Share Data)
Market value of equity (S = P n)			$20,846.71
Total value (V = D + S)			$24,303.71
Percent financed with debt (wd = D/V)	k		14.2%
Percent financed with stock (ws = S/V)			85.8%
Cost of Capital
Cost of debt (rd)			3.33%
Beta (b)			1.15
Risk-free rate (rRF)			2.20%
Market risk premium (RPM)			10.30%
Cost of equity (rs = rRF + b RPM )			14.05%
Cost of Equity from Dividend Growth Model
Future Dividend Growth Rate			19.05%
Last Dividend $			0.9000
Share Price $ (4/5/13)			$71.91
Cost of Equity from Dividend Growth Model			20.54%
Cost of Equity from Bond Plus Markup
Cost of debt			3.33%
Risk Markup			9.80%
Cost of Equity from Bond Plus Markup			13.13%
Average rs			15.9%
WACC			13.97%