Country cooks cost of equity is 16.2 percent and it’s after tax cost of debt is...
Homework Answers
Cost of equity = 16.20%
After tax Cost of debt = 5.80%
Debt Equity ratio = 0.42
Weight of debt = 0.42/ (1 + 0.42)
= 29.58%
Weight of equity = 70.42%
Now, WACC is calculated below:
WACC = (70.42% × 16.20%) + (29.58% × 5.80%)
= 11.41% + 1.72%
= 13.12%
firms weighted average cost of capital is 13.12%.
Add Answer to:
Country cooks cost of equity is 16.2 percent and it’s after tax
cost of debt is...
Meiston Press has a debt-equity ratio of 1.80. The pre-tax cost of debt is 9.00 percent...
Meiston Press has a debt-equity ratio of 1.80. The pre-tax cost of debt is 9.00 percent and the cost of equity is 14.1 percent. What is the firm’s weighted average cost of capital (WACC) if the tax rate is 34 percent? 10.00 percent 8.85 percent 9.63 percent 10.88 percent
Fama's Llamas has a weighted average cost of capital of 10.5 percent. The company's cost of equity is 17 percent, an...
Fama's Llamas has a weighted average cost of capital of 10.5
percent. The company's cost of equity is 17 percent, and its pretax
cost of debt is 8 percent. The tax rate is 34 percent. What is the
company's target debt-equity ratio?
Check my work Fama's Llamas has a weighted average cost of capital of 10.5 percent. The company's cost of equity is 17 percent, and its pretax cost of debt is 8 percent. The tax rate is 34 percent....
The Five and Dime Store has a cost of equity of 14.8 percent, a pretax cost...
The Five and Dime Store has a cost of equity of 14.8 percent, a pretax cost of debt of 6.7 percent, and a tax rate of 34 percent. What is the firm's weighted average cost of capital if the debt-equity ratio is .46?
Autozone's has a debt-equity ratio of 0.80 and a tax rate of 35 percent. The firm...
Autozone's has a debt-equity ratio of 0.80 and a tax rate of 35 percent. The firm does not issue preferred stock. The cost of equity is 12.5 percent and the aftertax cost of debt is 4.5 percent. What is the weighted average cost of capital?
The Pumpkin Inc. has a cost of equity of 16.5 percent and a pre-tax cost of...
The Pumpkin Inc. has a cost of equity of 16.5 percent and a pre-tax cost of debt of 9.4 percent. The firm's target weighted average cost of capital is 12 percent and its tax rate is 20 percent. What is the firm's debt-equity ratio? a) 0.89 b) 1.00 c) 1.26 d) 0.77
Acme Corp. is financed 40% with debt. The pre-tax cost of debt is 5.8%. Equity investors...
Acme Corp. is financed 40% with debt. The pre-tax cost of debt is 5.8%. Equity investors require a return on their investment of 12.3%. The company's marginal tax rate is 21%. What is the weighted average cost of capital (WACC)? 9.7% 7.4% 9.2% Not enough information.
Hannibal Corp. has a cost of equity of 12%, and an after-tax cost of debt of...
Hannibal Corp. has a cost of equity of 12%, and an after-tax cost of debt of 7%. Using market values, Hannibals debt is 40% of the value of the firm and its equity is 60% of the value of the firm. What is the weighted average cost of capital? Dexter Corp. can borrow at 9% and is has a 23% marginal tax rate. What is the after-tax cost of debt? Columbia Corporation has a beta of 1.6, the risk-free rate...
Why do we use after-tax cost of debt but not after-tax cost of equity when calculating...
Why do we use after-tax cost of debt but not after-tax cost of equity when calculating the weighted average cost of capital (WACC)?
Roger, Inc., has a debt-equity ratio of 2.85. The firm’s weighted average cost of capital is...
Roger, Inc., has a debt-equity ratio of 2.85. The firm’s weighted average cost of capital is 10 percent and its pretax cost of debt is 6 percent. The tax rate is 24 percent. a. What is the company’s cost of equity capital? b. What is the company’s unlevered cost of equity capital? c. What would the company’s weighted average cost of capital be if the company's debt-equity ratio were .25 and 1.85?
A firm has debt of $5,000, equity of $16,000, a cost of debt of 8 percent,...
A firm has debt of $5,000, equity of $16,000, a cost of debt of 8 percent, a cost of equity of 12 percent, and a tax rate of 21 percent. What is the firm's weighted average cost of capital? 10.20 percent 9.94 percent 10.90 percent 10.65 percent 11.05 percent
Fama's Llamas has a weighted average cost of capital of 10.5
percent. The company's cost of equity is 17 percent, and its pretax
cost of debt is 8 percent. The tax rate is 34 percent. What is the
company's target debt-equity ratio?
Check my work Fama's Llamas has a weighted average cost of capital of 10.5 percent. The company's cost of equity is 17 percent, and its pretax cost of debt is 8 percent. The tax rate is 34 percent....
Most questions answered within 3 hours.
-
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 49 minutes ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 1 hour ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 1 hour ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 1 hour ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 1 hour ago -
Why are polymers not typically casted into products?
asked 1 hour ago -
When rolling a die 129 times, what is the probability of rolling
a 6 no more...
asked 1 hour ago -
4. A call option currently sells for $7.75. It has a strike
price of $85 and...
asked 1 hour ago -
1.
You need to prepare 10.0 liters of an acid aqueous solution with a
pH of...
asked 1 hour ago -
Along an aggregate supply curve, if the level of output is less
than the natural level...
asked 1 hour ago -
By 2025, annual consumption in emerging markets will total $30
trillion and contribute more than ________...
asked 1 hour ago -
At what point does reformation cease to be a viable option for
those who are oppressed...
asked 1 hour ago