Answered: Meiston Press has a debt-equity ratio… | bartleby

Entrepreneurial Finance

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 11EP

See similar textbooks

Related questions

Question

Accounting meiston press has a debt equity ratio of 1.10 ..calculate

Meiston Press has a debt-equity ratio of 1.10. The pre-tax cost
of debt is 8.65 percent and the cost of equity is 13.4 percent.
What is the firm's weighted average cost of capital (WACC)
if the tax rate is 34 percent?
a. 11.40 percent
b. 9.37 percent
c. 10.15 percent
d. 10.52 percent

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Blurred answer

Similar questions

The Tip-Top Paving Co. has an equity cost of capital of 16.97%. The debt to value ratio is .6, the tax rate is 34%, and the cost of debt is 11%. What is the cost of equity if Tip-Top was unlevered? O a. 10.0%. O b. 16.0%. C. 12.0%. O d. 14.0%
The ABCCompany has a cost of equity of 21.2 percent, a pre-tax cost of debt of 5.2percent, and a tax rate of 30 percent. What is the firmâ€™s weighted average costof capital if the proportion of debt is 65.6%?Note: Enter your answer rounded off to two decimal points.Do not enter % in the answer box. For example, if your answer is 0.12345 thenenter as 12.35 in the answer box.
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%
Give 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?
The Two Dollar Store has a cost of equity of 12.8 percent, the YTM on the company's bonds is 5.3 percent, and the tax rate is 35 percent. If the company's debt–equity ratio is .63, what is the weighted average cost of capital? Multiple Choice 7.86% 9.18% 7.06% 8.57% 9.80%
Company X has a cost of equity of 16.31% and a pretax cost of debt of 7.8%. The debt-equity ratio is 0.56 and the tax rate is 21%. What is the unlevered cost of capital? A )14.01% b) 13.85% c) 13.70% D) 14.08% E)14.26%
A levered firm has a pretax cost of debt of 6.8 percent and an unlevered cost of capital of 14 percent. The tax rate is 21 percent and the cost of equity is 17.7 percent. What is the debt-to-equity ratio? O 0.65 0.47 0.41 O 0.52
A business has a cost of equity of 9.5 percent and a pretax cost of debt of 5.4 percent. The debt-equity ratio is 1.50 and the tax rate is 25 percent. What is the unlevered cost of capital? 7.07% 7.20% 7.33% 7.46% 7.59%
A firm has two components in its capital structure, debt and equity. The after-tax cost of debt is 3% and the cost of equity is 11%. The proportion of equity in the capital structure is 75%. What is the firm's Weighted Average Cost of Capital? Select one: a. 9.47% b. 8.78% c. 9.00% d. 8.37%
Gamma Inc. has a weighted average cost of capital of 18.60%. The firm’s cost of equity is 24.40%, and it’s cost of debt is 15%. The tax rate is 34%. What is Gamma’s debt-to-equity ratio?
Find the WACC given the following information: A firm has a cost of equity of 8% and cost of debt of 6.5%. The debt - toequity ratio is 0.75. The tax rate is 15%.
A firm had a debt ratio of 0.85. The pretax cost of debt is 8% and the reqiured return on asset is 15.5%. What is the cost of equity if we factorin the firms tax rate of 24%? A) 19.53 B) 18.92 C) 21.57 D) 20.35 E) 20.96

SEE MORE QUESTIONS

Recommended textbooks for you

Entrepreneurial Finance

Entrepreneurial Finance

Finance

ISBN:

9781337635653

Author:

Leach

Publisher:

Cengage

Entrepreneurial Finance

Entrepreneurial Finance

Finance

ISBN:

9781337635653

Author:

Leach

Publisher:

Cengage

SEE MORE TEXTBOOKS