Cost of equity and Pre-tax cost of debt of Company Z is 15% 9.2 % respectively. Company pays tax at 40%. The target debt-equity ratio to maintain weight average cost of capital of 11.25% Is: 0.6545
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- Calculate the WACC using the following information: Debt-Equity ratio is 50%. Cost of debt is 8.00% Cost of equity is 10.00% Company pays tax at 35%. a) 7.60% b) 8.40% c) 9.33% d) 9.00%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%X company has an unlevered cost of capital of 11%, a cost of debt of 8%, and a tax rte of 35%. What is the target debt-equity ratio if the targeted cost of equity is 12%?
- The after-tax cost of debt for a firm, which has a marginal tax rate of 28% is correctly calculated at 6%. Calculate the before-tax cost of debt. a. 6.0% b. 7.7% c. 10.0% d. 8.3%The Amer Company has the following characteristics:Sales 1,000Total assets 1,000Total debt/Total assets 35.00%Basic earning power (BEP) ratio 20.00%Tax rate 40.00%Interest rate on total debt 4.57%What is Amer’s ROE?Company A's cost of equity and cost of debt are 14 and 7 percent respectively. The current tax rate is 30%. Company A has a debt to equity ratio of 50%. Company A ; weighted average cost capital is 8.05% 9.6% 10.05% 9.45% none
- 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%Assume the following data for U&P Company: Debt (D) = $100 million; Equity (E) = $300 million; rD = 6%; rE = 12%; and TC = 30%. Calculate the after-tax weighted average cost of capital (WACC): Multiple Choice A) 10.5% B) 10.05% C) 15% D) 9.45%What is the WACC for the following company with: Debt rate: 7% Cost of Equity: 11% Percentage equity: 50% Percentage debt: 50% Tax rate: 35%
- 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?A company has debt, equity share and overdraft financing. The overdraft is used to finance the day-to-day activities of the company when necessary. The after-tax cost of debt is 12%, the cost of equity is 20% and the after-tax cost of the overdraft is 18%. The market value of debt is R1 000 000, the market value of equity is R2 000 000 and the market value of the overdraft is R500 000. Calculate the company’s weighted average cost of capital (rounded to two decimal places). a. 18.33% b. 17.33% c. 18.43% d. 19.33% e. 17.43%B & B Ltd. has a weighted average cost of capital of 10.5%. The company's cost of equity is 15.5%, and its pretax cost of debt is 8.5%. The tax rate is 34%. What is the company's target debt-equity ratio?