Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. intel. the following is information for intel. int

INTEL. The following is information for Intel. Intel wants to pursue a new type of...

70.2K

Verified Solution

Question

Finance

image
image
INTEL. The following is information for Intel. Intel wants to pursue a new type of artificial intelligence (Al) chip that would be used in all sorts of Al applications like ChatGPT. They want to know what they should use for their WACC (weighted average cost of capital). There are currently 20 year 6.22% coupon bonds that pay semi-annual payments and are noncallable available at a price of $1,034,33 and a face value of $1,000. Preferred stock sells, for $188.67 and pays an annual dividend of $8.50, The current risk free rate is 4.0% and the market risk premium is 5.22%. Intel's common stock has a BETA of : 81. It sells for a price of $31.32 per share and pays an antual dividend of $.50. The dividend growth rate is expected to be 5.75% a year. ThiLbond-yield risk premium is 2.25%. Intel has a target capital structure of 60% debt, 15% preferred stock and the rest is common equity. Intel's tax rate is 22,33% Use the information provided about Intel to answer this question. What is Intel's cost of common equity using the DCF method? A. 5.31% B. 6.09% C. 7.44% D. 8.64%

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Calculus
1.2K views

In at x 0 2

Accounting
1.2K views

Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication...

Electrical Engineering
1.2K views

Para maximizar la transmisión de potencia a la línea la impedancia de entrada de la línea...

Mechanical Engineering
1.2K views

Both the Fourier Series and the Discrete Fourier Transform are calculated using summation. Explain the key...

Geometry
1.2K views

Which graph is used to model piece rate pay O A Scatterplot OB Quadratic equation...

Geometry
1.2K views

Find the measure of angle b in degrees Round to two decimal places as necessary...

Basic Math
1.2K views

Consider a Poisson process with rate ? = 2 and let T be the time...

Basic Math
1.2K views

An architect is making a model of a building she is designing. The kitchen will...

Calculus
1.2K views

Let p x be the density function given by Find the mean value of p...

Accounting
1.2K views

DQuestion 33 2 pts A firm issues 10-year bonds with no stated interest rate ("zero...

Accounting
1.2K views

Purchases and sales of a certain product during Jan 2009 are given below. Purchases On...

Accounting
1.2K views

Statement of Cash Flows-Indirect Method The comparative balance sheet of Yellow Dog Enterprises Inc. at...