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Debbies Cookies has a return on assets of 9.7 percent and a cost of equity of 12.8 percent. What is the pretax cost of debt

Tauntons is an all-equity firm that has 160,500 shares of stock outstanding. The CFO is considering borrowing $347,000 at 8Hotel Cortez is an all-equity firm that has 12,700 shares of stock outstanding at a market price of $44 per share. The firmsSouthern Wind is an all-equity firm with 17,300 shares of stock outstanding and a total market value of $353,000. Based on it

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Answer #1

WACC = Wd X Kd + We X Ke 9.7% = (0.9/1.90 x Kd) + (1/1.9 x 0.128) Kd = after cost of debt = 6.26% Pre tax cost of debt = 6.26

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