What is the capital structure weight of the firm's equity if the firm's tax rate is 35 percent on this financial accounting question? Bermuda Cruises issues only common stockand coupon bonds. The firm has a debt-equityratio of 0.45. The cost of equity is 17.6 percentand the pretax cost of debt is 8.9 percent. Whatis the capital structure weight of the firm'sequity if the firm's tax rate is 35 percent?a. 59.08 percentb. 52.93 percentc. 49.97 percentd. 68.97 percent66.75 percent

Here's how to calculate the capital structure weight of the firm's equity:1. Understand the…

Answered: Bermuda Cruises issues only common…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Blitz Industries has a debt-equity ratio of 1.7. Its WACC is 8.1 percent, and its cost of debt is 5.7 percent. The corporate tax rate is 23 percent. a. What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. What would the cost of equity be if the debt-equity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. What would the cost of equity be if the debt-equity ratio were 1.0? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-3. What would the cost of equity be if the debt-equity ratio were zero? (Do not round intermediate…
Blitz Industries has a debt-equity ratio of 1.2. Its WACC is 7.4 percent, and its cost of debt is 5.1 percent. The corporate tax rate is 22 percent. a. What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. What would the cost of equity be if the debt-equity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. What would the cost of equity be if the debt-equity ratio were 1.0? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-3. What would the cost of equity be if the debt-equity ratio were zero? (Do not round intermediate…
Fama's Llamas has a weighted average cost of capital of 9.4 percent. The company's cost of equity is 13 percent, and its pretax cost of debt is 6.7 percent. The tax rate is 22 percent. What is the company's target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.) L Debt-equity ratio
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Fama's Llamas has a weighted average cost of capital of 11 percent. The company's cost of equity is 15 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 32 percent. What is the company's target debt-equity ratio? a) 0.678 b) 0.7119 c) 0.7051 d) 1.1429 e) 0.6441
Subject:- finance
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Fama’s Llamas has a weighted average cost of capital of 10.4 percent. The company’s cost of equity is 13 percent and its pretax cost of debt is 7.9 percent. The tax rate is 24 percent. What is the company's debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) Debt-equity ratio:______?
Accounting meiston press has a debt equity ratio of 1.10 ..calculate

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