Rogot Instruments makes fine violins and cellos. It has $1.0 million in debt outstanding, equity valued at $2.0 million and pays corporate income tax at rate 21%. Its cost of equity is 12% and its cost of debt is 7%. a. What is Rogot's pretax WACC? b. What is Rogot's (effective after-tax) WACC? ..... a. What is Rogot's pretax WACC? Rogot's pretax WACC is %. (Round to two decimal places.)

Rogot Instruments makes fine violins and cellos. It has $1.0 million in debt outstanding, equity valued at $2.0 million and pays corporate income tax at rate 21%. Its cost of equity is 12% and its cost of debt is 7%. a. What is Rogot's pretax WACC? b. What is Rogot's (effective after-tax) WACC? ..... a. What is Rogot's pretax WACC? Rogot's pretax WACC is %. (Round to two decimal places.)

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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K Rogot Instruments makes fine violins and cellos. It has $1.8 million in debt outstanding, equity valued at $2.9 million, and pays corporate income tax at rate 25%. Its cost of equity is 11% and its cost of debt is 5%. a. What is Rogot's pretax WACC? b. What is Rogot's (effective after-tax) WACC? a. What is Rogot's pretax WACC? Rogot's pretax WACC is%. (Round to two decimal places.)
Rogot Instruments makes fine violins and cellos. It has $1.7 million in debt outstanding, equity valued at $2.9 million and pays corporate income tax at rate 21%. Its cost of equity is 11% and its cost of debt is 8%. a. What is Rogot's pretax WACC? b. What is Rogot's (effective after-tax) WACC?
Rogot Instruments makes fine violins and cellos. It has $1.9 million in debt outstanding, equity valued at $2.5 million, and pays corporate income tax at rate 33%. Its cost of equity is 13% and its cost of debt is 6%. a. What is Rogot's pre-tax WACC? b. What is Rogot's (effective after-tax) WACC? a. What is Rogot's pre-tax WACC? Rogot's pre-tax WACC is %. (Round to two decimal places.) b. What is Rogot's (effective after-tax) WACC? Rogot's (effective after-tax) WACC is %. (Round to two decimal places.)
Vijay
Bac Corp. has no debt but can borrow at 6.4 percent. The firm’s WACC is currently 10.2 percent, and the tax rate is 35 percent. (SHOW YOUR WORK) What is the company’s cost of equity? If the firm converts to 25 percent debt, what will its cost of equity be? If the firm converts to 50 percent debt, what will its cost of equity be? What is the company’s WACC in part (b)? In part (c)?
WACC Kose, Inc., has a target debt- equity ratio of .65. Its WACC is 11.2 percent, and the tax rate is 35 percent. a. If Kose's cost of equity is 15 percent, what is its pretax cost of debt? b. If instead you know that the aftertax cost of debt is 6.4 percent, what is the cost of equity?
What is Walkeshewar's WACC if it's equity costs 11.8 percent, the cost of it's debt is 6.3 percent, the debt to equity ratio is .53 and Walkeshewar's tax rate is 39 percent?
Dollar General (DG) is choosing between financing itself with only equity or with debt and equity. Regardless of how it finances itself, the EBIT for DG will be $545.63 million. If DG does use debt, the interest expense will be $57.85 million. If DG‘s corporate tax rate is 0.30, how much will DG pay (in millions) in total to ALL investors if it uses both debt and equity? Instruction: Type ONLY your numerical answer in the unit of millions
Starset, Incorporated, has a target debt-equity ratio of 0.76. Its WACC is 10.5 percent, and the tax rate is 32 percent. If the company's cost of equity is 14.5 percent, what is the pretax cost of debt? If instead you know that the aftertax cost of debt is 6.7 percent, what is the cost of equity?
CCR Incorporated is considering a new project. The company has a debt-equity ratio of .62. The company’s cost of equity is 11.8%, and the after tax cost of debt is 4.9%. What is the WACC for CCR?
Butler, Inc., has a target debt-equity ratio of 1.60. Its WACC is 7.8 percent, and the tax rate is 25 percent. a. If the company's cost of equity is 12.9 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 4.3 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. Pretax cost of debt % b. Cost of equity %
Clifford, Inc., has a target debt-equity ratio of .80. Its WACC is 9.1 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 %

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