After-tax cost of debt=9.5*(1-tax rate)
=9.5*(1-0.3)=6.65%
WACC=Respective costs*Respective weight
=(0.37*14.5)+(0.18*11)+(0.45*6.65)
=10.34%(Approx).
Suppose that B2B, Inc. has a capital structure of 37 percent equity, 18 percent preferred stock,...
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1. Suppose that TapDance, Inc.’s, capital structure features 65 percent equity, 35 percent debt, and that its before-tax cost of debt is 7 percent, while its cost of equity is 12 percent. Assume the appropriate weighted average tax rate is 34 percent. What will be TapDance’s WACC? (Round your answer to 2 decimal places.) 2. Suppose that MNINK Industries’ capital structure features 63 percent equity, 7 percent preferred stock, and 30 percent debt. Assume the before-tax component costs of equity,...
11-17, WACC. please show formula using Excel
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Suppose that TapDance, Inc.’s capital structure features 75
percent equity, 25 percent debt, and that its before-tax cost of
debt is 8 percent, while its cost of equity is 13 percent. The
appropriate weighted average tax rate is 21 percent.
What will be TapDance’s WACC? (Round your answer to 2
decimal places.)
Suppose that TapDance, Inc.'s capital structure features 75 percent equity, 25 percent debt, and that its before-tax cost of debt is 8 percent, while its cost of equity...
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