Introduction of Financial Management of the Apple & Intel Corporation

The aim of this paper is to demonstrate the weighted average cost of capital (WACC) of the Apple & Intel Corporation. The weighted average cost of capital determines whether the corporation has maintained the optimum capital structure or not. The low cost of capital indicates an optimum capital structure. Along with WACC, the paper has evaluated the stock value using the Discounted Dividend Model (DDM). After evaluating the stock value it is compared with the current price of the stock. Overall the paper provides a brief overview of the financial status of both the corporations.

Apple Corporation of Financial Management of the Apple & Intel Corporation

Apple Corporation is one of the world largest technology organizations. The Headquarter of the corporation is located in Cupertino California. The organization manufactures various products which include iPhone, iPad, Mac and other electronic equipment. The organization was established in the year 1976. According to 2018 estimates, the corporation is operating approximately 500 retail stores. The company has employed 123000 employees up to 2017. The organization has experienced immense growth with the passage of time and has the presence in many countries around the world.

Intel Corporation of Financial Management of the Apple & Intel Corporation

Intel organization is a multinational organization. The Headquarter of the Intel Corporation is located in Santa Clara California USA. The organization was established in the year 1968. The products that the company manufactures include microprocessors, CPUs, Modems and Mobile phones. According to 2017 estimates the company has employed 106000 employees.

Estimating the Stock Value

The above table is depicting the estimated stock price of the Apple Corporation (Tennent, 2008).

The above table is depicting the estimated stock price of Intel Corporation

Estimating Cost of Capital (WACC)

The weighted average cost of capital of the Apple Corporation is 12.64%. In the above table, it can be seen that the book value of debt is $101356 and the book value of equity is $940413.354.  The weight of equity is 0.902 and the weight of debt is 0.097. Through analyzing the WACC of Apple Inc. it can be said that the company should take measures to reduce its cost of capital a bit because it is a bit higher than Intel Corporation who is another technological firm (Pandey, 2015).

Conclusion on Financial Management of the Apple & Intel Corporation

If all the above discussion is summarized than it is evident that The WACC of both the corporations is not much higher however it is suggested to the corporation to take some steps to reduce the cost of capital even further so that company can smooth its operations.

References of Financial Management of the Apple & Intel Corporation

Pandey, I. (2015). Financial Management. Vikas Publishing House.

Tennent, J. (2008). Guide to Financial Management (illustrated ed.). John Wiley & Sons.