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Weighted Average Cost of Capital (WACC)
Apple Inc. has 5,366,166,000 shares traded at a market value of$126 per share; its debt outstanding has an estimated market valueof $90,883,140,000. The stock has a beta of 1.193. The expectedreturn on stocks is 8.78%. The firm is rated AAA and paid 30% ofits income as taxes. The risk-free rate is 2.47%, and theyield-to-maturity of Appleâs bonds is 3.27%.
A. What is Appleâs debt ratio?
B. What is Appleâs equity ratio?
C. What is Appleâs after-tax cost of debt?
D. What is Appleâs investors required return on equity?
E. What Appleâs cost of capital (after-tax WACC)?
Weighted Average Cost of Capital (WACC)
Apple Inc. has 5,366,166,000 shares traded at a market value of$126 per share; its debt outstanding has an estimated market valueof $90,883,140,000. The stock has a beta of 1.193. The expectedreturn on stocks is 8.78%. The firm is rated AAA and paid 30% ofits income as taxes. The risk-free rate is 2.47%, and theyield-to-maturity of Appleâs bonds is 3.27%.
A. What is Appleâs debt ratio?
B. What is Appleâs equity ratio?
C. What is Appleâs after-tax cost of debt?
D. What is Appleâs investors required return on equity?
E. What Appleâs cost of capital (after-tax WACC)?
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Jean KeelingLv2
28 Sep 2019