Royal Jewelers Inc. has an after-tax cost of debt of 10.90 percent. With a tax rate of 40 percent, what can you assume the yield on the debt is?
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- Royal Jewelers Inc. has an aftertax cost of debt of 12.45 percent. With a tax rate of 40 percent, what can you assume the yield on the debt is? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Yield %Harmony Sego has a tax rate of 21%, the interest rate on debt is 10%, and the WACC is 15%. If the debt ratio is 60% (i.e., the weight on debt), what is the expected rate of return to equity holders? O 12.50% O 22.50% O 25.65% O 21.25%Vijay
- Caddy manufacturing has a target debt equity ratio of .45. Its cost of equity is 10.3%, and its pre- tax cost of debt is 6.4%. If the tax rate is 21%, what is the company's WACC ? Pls type in computer! ThanksWhat 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?Arnell Industries has 5.5 million in permanent debt outstanding. The firm will pay interest only on this debt. Arnell's marginal tax rate is expected to be 40% for the foreseeable future. a. Suppose Arnell pays interest of 9% per year on its debt. What is its annual interest tax shield? b. What is the present value of the interest tax shield, assuming its risk is the same as the loan? c. Suppose instead the interest rate on the debt were 7%. What is the present value of the interest tax shield in this case?
- Pogo Stick Co can issue debt yielding 10 percent. The company is paying at a 40 percent tax rate. What is the aftertax cost of debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Cost of debt %Answer all the questionsA firm will earn a taxable net return of $500 million next year. If it took on debt today, it would have to pay creditors\varepsilon(rDebt) = 5% + 10% x wDebt2. Thus, if the firm has 100% debt, the financial markets would demand 15% expected rate of return. Further, assume that the financial markets will lend the firm capital at this overall net cost of 15%, regardless of how the firm is financed. The firm is in the 25% marginal tax bracket. 1. If the firmis fully equity-financed, what is its value? 2. Using APV, if the firm is financed with equal amounts of debt and equity today, what is its value? 3. Using WACC, if the firm is financed with equal amounts of debt and equity today, what is its value? 4. Does this firm have an optimal capital structure? If so, what is its APV and WACC?
- 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 %Debbie's Cookies has a return on assets of 8.1 percent and a cost of equity of 12.5 percent. What is the pretax cost of debt if the debt–equity ratio is .87? Ignore taxes.(please correct answer and step by step solutions) Brannan Manufacturing has a target debt - equity ratio of 45. Its cost of equity is 11.4 percent, and its cost of debt is 6.1 percent. If the tax rate is 25 percent, what is the company's WACC?