Tokyu Co. has a WACC of 12 percent. Its debt sells at a yield to maturity of 8 percent and its tax rate is 25 percent. Its cost of equity is 15 percent. What is the company's Debt/Total Assets Ratio?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Question
Tokyu Co. has a WACC of 12 percent. Its debt sells
at a yield to maturity of 8 percent and its tax rate is
25 percent. Its cost of equity is 15 percent. What is
the company's Debt/Total Assets Ratio?
Transcribed Image Text:Tokyu Co. has a WACC of 12 percent. Its debt sells at a yield to maturity of 8 percent and its tax rate is 25 percent. Its cost of equity is 15 percent. What is the company's Debt/Total Assets Ratio?
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