Caddie Manufacturing has a target debt-equity ratio of .75. Its cost of equity ispercent, and its pretax cost of debt is 7 percent. If the tax rate is 25 percent, what is 1company's WACC? (Do not round intermediate calculations and enter your answera percent rounded to 2 decimal places, e.g., 32.16.)WACC%

The cost of capital is the rate of return that a company gives on all its capital whether it is…

Caddie Manufacturing has a target debt-equity ratio of .75. Its cost of equity is percent, and its pretax cost of debt is 7 percent. If the tax rate is 25 percent, what is company's WACC? (Do not round intermediate calculations and enter your answer a percent rounded to 2 decimal places, e.g., 32.16.) WACC %

Caddie Manufacturing has a target debt-equity ratio of .75. Its cost of equity is percent, and its pretax cost of debt is 7 percent. If the tax rate is 25 percent, what is company's WACC? (Do not round intermediate calculations and enter your answer a percent rounded to 2 decimal places, e.g., 32.16.) WACC %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Jones Soda estimates that its required return on equity is 11.0 percent and the yield to maturity on its debt is 5.0 percent. The company's equity-to-asset ratio is 0.7 and the marginal tax rate is 30%. What is the company's weighted average cost of capital? Enter your answer as a percent and round to two decimals, but don't include the % sign.
Suppose Essen Corp has the following weights and costs. What is the WACC if the company has a 21% tax rate? Component Common equity Debt (before tax) R 11.5% 0.8 0.2 7.5% 10.39% ()8.71% ()6.25% 9.50% 10.70% Page 29 of 30 Previous Page Next Page
Paraglide Corp. has a target debt-equity ratio of .48. Its cost of equity is 16.4 percent, and its pretax cost of debt is 8.2 percent. If the tax rate is 34 percent, what is the company's WACC? 11.28 percent 11.72 percent 13.20 percent 12.84 percent 12.91 percent
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
The Tailgate Store has a cost of equity of 8.6 percent. The company has an after-tax cost of debt of 4.5 percent, and the tax rate is 39 percent. If the company's debt-equity ratio is .65, what is the weighted average cost of capital? 8.85% 9.10% 6.55% 7.15% 6.98%
Alpha Co. has a debt-equity ratio of 0.6, a pretax cost of debt of 7.5 percent, and an unlevered cost of equity of 12 percent. What is Alpha's cost of equity if you ignore taxes? Multiple choice question. 16.5% 9.3% 14.7% 12% Explain why
Jones Soda estimates that its required return on equity is 11.0 percent and the yield to maturity on its debt is 6.0 percent. The company's equity-to-asset ratio is 0.2 and the marginal tax rate is 30%. What is the company's weighted average cost of capital? Enter your answer as a percent and round to two decimals, but don't include the % sign. Numeric Response
only looking for parts c-1 and c-3
Ursala, Incorporated, has a target debt-equity ratio of 1.20. Its WACC is 8.7 percent, and the tax rate is 25 percent. a. If the company's cost of equity is 13 percent, what is its pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If instead you know that the aftertax cost of debt is 5.8 percent, what is the cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of debt b. Cost of equity 6.31 % 13.39 %
Brannan Manufacturing has a target debt-equity ratio of .30. Its cost of equity is 12.5 percent, and its pretax cost of debt is 7.2 percent. If the tax rate is 25 percent, what is the company’s WACC? WACC: (by %)
Garcia Company has no debt. Its cost of capital is 10.8 percent. Suppose the company converts to a debt-equity ratio of 1. The interest rate on the debt is 7.9 percent. Ignore taxes for this problem. What is the company’s new cost of equity? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is its new WACC? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

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