Can you explain this general accounting question using accurate calculation methods? Greenfield Technologies has 30 million shares outstanding, trading at $22per share. Additionally, Greenfield has $180 million in outstanding debt.Suppose Greenfield's equity cost of capital is 12%, its debt cost of capital is6%, and the corporate tax rate is 35%. Greenfield's after-tax debt cost ofcapital is closest toa. 6.5%b. 3.9%c. 4.5%d. 8.4%

Given:Pre-tax cost of debt = 6% = 0.06Corporate tax rate = 35% = 0.35 Step-by-Step…

Answered: Greenfield Technologies has 30 million…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 7P

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← Unida Systems has 35 million shares outstanding trading for $12 per share. In addition, Unida has $95 million in outstanding debt. Suppose Unida's equity cost of capital is 16%, its debt cost of capital is 8%, and the corporate tax rate is 38%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is%. (Round to two decimal places.)
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Unida Systems has 43 million shares outstanding trading for $12 per share. In addition, Unida has $106 million in outstanding debt. Suppose Unida's equity cost of capital is 17%, its debt cost of capital is 8%, and the corporate tax rate is 33%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital?
Yellow Submarine, Co. has a cost of equity of 10.84 percent, a cost of debt of 5.47 percent, and a tax rate of 21 percent. The company uses only debt and equity and the company's percentage of debt in its capital structure is 38 %. What is the company's WACC? Multiple Choice 8.80% 8.36% 10.82% 6.60%
Aspen's Distributors has a levered cost of equity of 13.84 percent and an unlevered cost of capital of 12.5 percent. The company has $5,000 in debt that is selling at par. The levered value of the firm is $14,600 and the tax rate is 25 percent. What is the pretax cost of debt? A) 7.92 percent B) 9.07 percent C) 8.16 percent D) 8.84 percent
Unida Systems has 35 million shares outstanding trading for $11 per share. In addition, Unida has $87 million in outstanding debt. Suppose Unida's equity cost of capital is 14%, its debt cost of capital is 7%, and the corporate tax rate is 40%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is 12.7%. (Round to one decimal place.) b. What is Unida's after-tax debt cost of capital? Unida's after-tax debt cost of capital is 4.2%. (Round to one decimal place.) c. What is Unida's weighted average cost of capital? Unida's weighted average cost of capital is %. (Round to one decimal place.)
Unida Systems has 46 million shares outstanding trading for $12 per share. In addition, Unida has $85 million in outstanding debt. Suppose Unida's equity cost of capital is 13%, its debt cost of capital is 8%, and the corporate tax rate is 28%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is %. (Round to two decimal places.)

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