Delta Core Industries aims for a weighted average cost of capital (WACC) of 9%. The firm has an after-tax cost of debt and a cost of equity of 5% of 11%. What debt-to-equity ratio should the firm use to achieve its target WACC?
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- what is the firms weighted average cost of capita if the tax rate is 34 percent ??Precision Cuts 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 21 percent, what is the company's WACC? Group of answer choices A) 13.18% B) 11.72% C) 12.91%You have the following information on a company on which to base your calculations and discussion: Cost of equity capital (rE) = 18.55% Cost of debt (rD) = 7.85% Expected market premium (rM –rF) = 8.35% Risk-free rate (rF) = 5.95% Inflation = 0% Corporate tax rate (TC) = 35% Current long-term and target debt-equity ratio (D:E) = 2:5 a. What are the equity beta (bE) and debt beta (bD) of the firm described above?[Hint: Assume that the above costs of capital have been generated by an appropriate equilibrium model.] b. What is the weighted-average cost of capital (WACC) for this firm at the current debt-equity ratio? c. What would the company’s cost of equity capital become if you unlevered the capital structure (i.e. reduced gearing until there is no debt)
- Tom Manufacturing Corp. desires a weighted average cost of capital of 8%. The firm has an after-tax cost of debt of 5% and a cost of equity of 14%. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital? A. 0.25 B. 0.50 C. 1.50 D. 2.00 E. 3.00Give typing answer with explanation and conclusion Fama's Llamas has a weighted average cost of capital of 11.5 per cent. The company's cost of equity is 16 per cent, and its cost of debt is 8.5 per cent. The tax rate is 35 per cent. What is Fama's debt–equity ratio?Farma's Llamas has a weighted average cost capital need help this question
- What is this firm debt equity ratio?What is the cost of equity for a firm where the required return on assets is 15.71%, the cost of debt is 6.92%, and the target debt/equity ratio is 1.19? Ignore taxes. O A) 19.05%A firm has a weighted average cost of capital of 8.4%, a cost of equity is 11%, and a pretax cost of debt of 5.8%. The tax rate is 25%. What is the company's target debt-equity ratio, expressed as a percentage? (Please, do not round your intermediate calculations; rou necessary, your final answer, expressed as a percentage, to two decimal places without the % symbol. Example, if your final answer calcula or X/Y, or X+Y, or X-Y, is 0.124556, enter it as 12.46)