Your company has two​ divisions: One division sells software and the other division sells computers through a direct sales​ channel, primarily taking orders over the internet. You have decided that...

Your company has two​ divisions: One division sells software and the other division sells computers through a direct sales​ channel, primarily taking orders over the internet. You have decided that Dell Computer is very similar to your computer​division, in terms of both risk and financing. You go online and find the following​ information: Dell's beta is 1.16, the​ risk-free rate is 4.6% its market value of equity is $65.5 billion, and it has $ 696 million worth of debt with a yield to maturity of 6.5%. Your tax rate is 38%

a. What is an estimate of the WACC for your computer sales​ division?

b. If your overall company WACC is 11.9% and the computer sales division represents 41% of the value of your​ firm, what is an estimate of the WACC for your software​ division?

​Note: Assume that the firm will always be able to utilize its full interest tax shield.