Workbook4.xlsx - THE COST OF CAPITAL FOR GOFF COMPUTER INC...

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2013 ASSETS Current assets: Cash and cash equivalents $ ### Short-term investments 208 Accounts receivable, net 6,629 3,213 Inventories, net 1,382 Other current assets 3,967 Total current assets 27,968 2,126 Long-term investments 2,565 1,349 Goodwill 9,304 February 1, Short-term financing receivables, net Property, plant, and equipment, net Long-term financing receivables, net THE COST OF CAPITAL FOR GOFF COMPUTER, I Goff Computer, Inc (GCI) was found eight years ago by Chris Goff and GCI sells primarily to in-store customers. Goff Computer, Inc. (GCI)’s growth to date has been financed from its Whenever the company had sufficient capital, it would open a new stor The company would like to determine its cost of capital. Because the co representative company. Question 1: Find the most recent 10Q ( quarterly) and 10K (annual) reports made by value of equity on their balance sheet. Dell Inc Consolidated statements of financial position (Form 10K) For the fiscal year ended February 1, 2013
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Goodwill 9,304 Purchased intangible assets, net 3,374 Other non-current assets 854 Total assets $ ### LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Short-term debt $ 3,843 Accounts payable 11,579 Accrued and other 3,644 Short-term deferred revenue 4,373 Total current liabilities 23,439 Long-term debt 5,242 Long-term deferred revenue 3,971 Other non-current liabilities 4,187 Total liabilities 36,839 Stockholders’ equity: 12,554 (32,145 ) Retained earnings 30,330 (59 ) Total Dell stockholders’ equity 10,680 Noncontrolling interest 21 Total stockholders’ equity 10,701 $ ### Total assets 47,540,000 Total liabilities= Book value of debt 36,839,000 Book value of equity 10,701,000 Commitments and contingencies (Note 10) authorized: 7,000; shares issued: 3,413 and 3,390, respectively; shares Treasury stock at cost: 1,200 and 1,154 shares, respectively Accumulated other comprehensive loss Total liabilities and stockholders’ equity
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Stock price $77.55 Market capitalism $ 59,714,000,000.00 Shares of stock outstanding 770006447.45 Yield on 3-month Treasury bills 1.23% Market risk premium 7% Beta 1.1 Cost of equity using Dell's beta: Rs= 0.0893 (CAPM): R S = R F + Beta x Market Risk Premium Question 2: Go to finance.yahoo.com to find information to estimate th
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IBM (international business machines Corp) 0.93 HP Inc. 1.82 Dell Inc. 1.1 CSCO (Cisco Systems Inc.) 1.2 XRX (Xerox Corp) 1.14 STX (Seagate Technology PLC) 1.68 NCR 1.81 Beta industry average 1.383 It does not matter if we use beta for Dell or beta for industry in this case. Beca
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