Calculate the WACC for a firm that pays 10% on its debt, requires an 18% rate of return on its equity, finances 45% of the market value of its assets with debt, and has a tax rate of 35%.
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Calculate the WACC for a firm that pays 10% on its debt, requires an 18% rate of
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- Find the WACC given the following information: A firm has a cost of equity of 8% and cost of debt of 6.5%. The debt - toequity ratio is 0.75. The tax rate is 15%.You have the following data for your company. Market Value of Equity: $520 Book Value of Debt: $130 Required rate of return on equity: 12% Required rate of return on debt (pre-tax): 7% Corporate tax rate: 25% The company's debt is assumed to be is reasonably safe, so the book value of debt is a reasonably approximation for the market value of debt. What is the weighted average cost of capital for this company?A company is financed through a loan with a bank at a cost of 10% effective annual rate, before taxes, and with resources contributed by the partners who demand a return of 20% effective annual rate. Knowing that the tax rate is 35%, and the debt to equity ratio [D/E] is equal to 1, the WACC (effective annual rate) is:
- A company has a WACC of 10%. It can borrow at 4%. Assume that the company has a target capital structure of 60% equity, 40% debt. The corporate tax rate is 20%. Based on MM Theory with taxes, what is the cost of equity? What is the WACC?a firm has a target debt-equity ratio of 0.35. Its cost equity is 11 percent and its before tax cost of debt is 4 percent. If the tax rate is 25% what is the company's WACC?A company finances its operations with 60 percent debt and the rest using equity. The annual yield on the company's debt is 4.1% and the required rate of return on the stock is 12.4%. What is company's WACC? Assume the tax rate is 30%
- A firm with a return on common equity (ROCE) of 25% has financial leverage of 35 %and a net after-tax borrowing cost of 5% on $220 million of net debt.What rate of return does this firm earn on its operations (RNOA)?Choose the correct letter of answer: In the current year, Company A had P15 Million in sales, while total fixed costs were held to P6 Million. The firm's total assets at year-end were P20 Million and the debt/equity ratio was calculated at 0.60. If the firm's EBIT is P3 Million, the interest on all debt is 9%, and the tax rate is 40%, what is the firm's return on equity? a. 11.16%b. 14.4%c. 18.6%d. 24.0%e. 28.5%A firm's cost of equity Ue) is 25%. Its before-tax cost of debt is 12%, and itsmarginal tax rate is 40%. The firm's capital structure calls for a debt-to-equityratio of 40%. Calculate the firm's cost of capital (k).
- Benjamin Manufacturing has a target debt-equity ratio of .45. Its WACC is 11.2%, and its cost of debt is 9 percent. What is the cost of equity if the tax rate is 20%?A firm has a target capital structure of 45% common stock and 55% debt. It costs of equity is 12.5% and the pretax cost of debt is 7.5%. The relevant tax rate is 23%. What is the firm's WACC?A company's CFO wants to maintain a target debt-to-equity ratio of 18%. If the WACC is 10.575%, and the pre-tax cost of debt is 6%, what is the cost of common equity assuming a corporate tax rate of 30%?Please show work