A company's capital structure is 40% debt and 60% equity. The interest cost on its debt is 10% and its cost of equity is 12%. The company is subject to 24.75% effective tax rate. what is the WACC for the company?

Q: Yellow Submarine, Co. has a cost of equity of 10.84 percent, a cost of debt of 5.47 percent, and a…

A: The Weighted Average Cost of Capital (WACC) is a pivotal financial metric representing a company's…

Q: Haricot Corporation and Pinto Corporation both have operating profits of $135 million. Haricot is…

A: For investors and analysts, operating profit is an essential indicator or tool because it provides…

Q: Haricot Corporation and Pinto Corporation both have operating profits of $195 million. Haricot is…

A: Data given:Haricot Corporation:Operating Profits =$195 millionFinanced solely by equityPinto…

Q: company is financed by both debt and common equity, and the market value of debt is 25% and equity…

A: The question is related to Cost of Capital and is related with Capital Asset Pricing Model (CAPM).…

Q: What is Walkeshewar's WACC if it's equity costs 11.8 percent, the cost of it's debt is 6.3 percent,…

A: WACC (weighted average cost of capital) refers to the average cost that is paid by a company to…

Q: Rain company whose tax rate is 40% has a total asset of P500,000,000 and earnings before interest…

A: Interest Payment is calculated on the debt part out of the total funds of the company. Net Income is…

Q: ford motor corporation's capital structure consists of 60% debt, 10% preferred stock, and 30% common…

A: Capital Ratio Cost Debt 60% 6.50% Preferred stock 10% 8.00% Common equity 30% 12.00%   Tax…

Q: Before-tax cost of debt for a company is 6.35%, while the after-tax cost of debt is 5.49%. What is…

A: Before-tax cost of debt = 6.35%After-tax cost of debt = 5.49%We need to determine the company's tax…

Q: PT XYZ is a garment company that produces batik and other traditional clothing. The company's…

A: The unlevered firm value is the value of the firm considering that it borrows no debt and is…

Q: Blue Co. is funded only by debt and equity with a weighted average cost of capital at 20%. The debt…

A: Weighted average cost of capital (WACC) = 20% Debt ratio = Weight of debt (Wd) = 20% or 0.2 Weight…

Q: A company has a total return on capital before tax of 10%. The interest rate on debt is 4% and the…

A: The company first of debt which is said to be the weighted average cost of capital which consist of…

Q: Assume that your company has $1,400,000 in debt outstanding, the before-tax cost of debt is 10…

A: Degree of total leverage is also called the degree of combined leverage. It is the product of degree…

Q: Palo Verde, Inc., has found that its cost of equity is 17 percent, and its (before-tax) cost of debt…

A: Weighted Average Cost of Capital (WACC) is the overall cost of capital from all the sources of…

Q: Sonova corporation has an operating income of $240000 and a 40% tax rate The firm has short term…

A: The operating profit (EBIT) is $240,000.The tax rate is 40%.The short term is $115,000 and long-term…

Q: The target capital structure for J&J Manufacturing is 50% common stock, 15% preferred equity and 35%…

A: WACC means Weighted Average cost of Capital. It is calculated as follows:- WACC = (cost of common…

Q: CoffeeCarts has a cost of equity of 15%, has a pre-tax cost of debt of 4%, and is financed 70% with…

A: Given details are : Cost of Equity (Ke) = 15% Pre tax cost of debt (Kd) = 4% Weight of Equity = 70%…

Q: GS Co.’s capital structure consists entirely of long-term liabilities and common equity. The cost of…

A: Cost of long term liabilities (Kd) = 0.03 Cost of common equity (Ke) = 0.05 Tax rate (T) = 0.30…

Q: How much pre tax income must a company with a tax rate of 35% need to earn per share to pay out…

A: Dividend per share (D) = $2.35Tax rate (T) = 0.35Pre tax income = ?

Q: A company is financed through a loan with a bank at a cost of 10% effective annual rate, before…

A: given, rd=10%re=20%tax = 0.35D/E= 1

Q: Company A's cost of equity and cost of debt are 14 and 7 percent respectively. The current tax rate…

A: The cost of capital is used as a benchmark for comparing different business decisions. It's a…

Q: Take it all away has a cost of equity of 10.84 percent, a pretax cost of debt of 5.47 percent, and a…

A: Given, Cost of equity = 10.84%. Cost of debt = 5.47%. Tax rate = 39%. Company's capital structure =…

Q: The cost of capital of a company that uses 45 percent debt that has an after-tax cost of debt of 10…

A: The weighted average cost of capital (WACC) is the rate that a company is expected to pay to all its…

Q: Apple’s debt-to-asset ratio is 35%. The before-tax cost of debt is 10% and the corporate tax rate is…

A: Debt to asset ratio = 35% Before tax cost of debt = 10% Tax rate = 45% WACC = 15%   Equity to asset…

Q: A company's after-tax cost of debt is 5.86 %, and its cost of retained earnings is 13.64%. If the…

A: > Given data:>After tax cost of debt = 5.86%> Cost of equity = 13.64%> Weight of equity…

Q: Lannister Manufacturing has a target debt-equity ratio of 0.66. Its cost of equity is 16 percent,…

A: Weighted average cost of capital can be calculated as: = (Weight of equity * Cost of equity) +…

Q: A company has 35% of its balance sheet as debt with a total amount of assets of EUR 17,000,000.If…

A: Weight of debt = 35% Weight of equity = 100% - 35% = 65%

Q: A firm has a target capital structure of 45% common stock and 55% debt. It costs of equity is 12.5%…

A: WACC refers to the return that the company provides to its stakeholders on average for their…

Q: PT XYZ is a garment company that produces batik and other traditional clothing. The company's…

A: Weighted average cost of capital shows a company average cost of capital from all the sources that…

Q: Idak Corp. has a pretax income of 21,000 and a 5% weighted-average cost of capital. Assets total…

A: Solution Economic value added = NOPAT - (WACC * capital invested)   Here NOPAT = Net operating…

Q: the specifics for a company are as follows: tax rate 35% Equity = 6,300,000…

A: A company may raise funds from multiple sources like common and preferred stock, debt, bonds, etc. A…

Q: A company's CFO wants to maintain a target debt-to-equity ratio of 18%. If the WACC is 10.575%, and…

A: Cost of capital:The cost of capital refers to the amount of money that a company must pay to finance…

Q: The Federal corporate tax rate currently is 21%.  If a company with anenterprise value of $3billion…

A: The question is related to MM Approach. As per Miller & Modigliani there are two types of firm…

Q: The cost of capital is 15%, the before-tax cost of debt is 9%, and the mar-ginal income tax rate is…

A: The cost of capital is the cost of raising funds a firm has to bear. It is the weighted average cost…

Q: f Average assets and capital are 900,000 and 540,000, respectively, with an ROE of 0.046, how much…

A: Average Assets are 900,000 Capital is 540,000 ROE is 0.046

Q: Black Inc.'s capital structure consists entirely of long-term debt and common equity. The cost of…

A: Cost of long term debt = 5% Tax rate = 40% After tax cost of debt (RD) = 5%*(1-0.40)…

Q: Metlock Enterprises is capitalized 40% with debt and 60% with equity. Its average debt rate is 7%,…

A:

Q: Fair Inc. has operating income for the year of $50,000, 000, and 25% flat tax rate. Its total…

A: Lets understand the basics. As the name suggest EVA denotes to economic value added. It is a profit…

Q: TRU Inc. desires to maintain a capital structure of 90% equity and 10% debt. They currently have an…

A: Weighted average cost of capital: Weighted Average Cost of Capital (WACC) is a financial metric used…