Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- 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 21 percent. What is the firm's weighted average cost of capital if the debt-equity ratio is 467 Multiple Choice O O 10.10% 11.80% 11.53% 13.49% 14.93%arrow_forwardThe Tailgate Store has a cost of equity of 8.6 percent. The company has an after-tax cost of debt of 4.5 percent, and the tax rate is 39 percent. If the company's debt-equity ratio is .65, what is the weighted average cost of capital? 8.85% 9.10% 6.55% 7.15% 6.98%arrow_forwardCompany X has a cost of equity of 16.31% and a pretax cost of debt of 7.8%. The debt-equity ratio is 0.56 and the tax rate is 21%. What is the unlevered cost of capital? A )14.01% b) 13.85% c) 13.70% D) 14.08% E)14.26%arrow_forward
- glenboro fire prevention corp has a profit margin of 7.70% total asset turn over of 1.90 and roe of 19.17%. what is this firm debt equity ratio?arrow_forwardThe capital structure of ABC Company is: Debt 40%. Equity 60%. The cost of debt is 13%. The cost of equity is 16.5%. What is the weighted average cost of capital for ABC Company? Show your calculationsarrow_forwardCalculate the Weighted Average Cost of Capital (WACC) Cost of Equity = 11.02% Cost of Debt = 5.35% Debt-to-Equity Ratio = 15.52%arrow_forward
- Based on the following information, what is the firm's weighted average cost of capital of the operating assets, WACCO? Cost of debt, RD: 7% Cost of equity, Rs: 20% Total market value of debt, D: 500 Total market value of equity, S: 1,500 Number of common shares outstanding: 100 Total market value of non-operating assets, N: 200 Cost of non-operating assets, RN: 9% Corporate tax rate, T: 40% O .143009 b. 168751 a. c. .188232 d. .127767arrow_forwardGamma Inc. has a weighted average cost of capital of 18.60%. The firm’s cost of equity is 24.40%, and it’s cost of debt is 15%. The tax rate is 34%. What is Gamma’s debt-to-equity ratio?arrow_forwardA firm has a cost of debt of 6.6 percent and a cost of equity of 12.1 percent. The debt-equity ratio is 78. There are no taxes. What is the firm's weighted average cost of capital? Multiple Choice 10.20% 8.07% 9.69% 8.94% 8.72%arrow_forward
- Homemade Flying Machines has a capital structure of 33% debt, 10% preferred stock and 57% common stock. The pre-tax cost of debt is 4.8%, the cost of preferred stock is 8% and the cost of equity is 13%. The firm's marginal tax rate is 21%. What is the company's weighted average cost of capital?arrow_forwardWhat is its cost of equity if there are no taxes or other imperfections? The firm has a debt-to-equity ratio of 0.60. Its cost of debt is 8%. Its overall cost of capital is 12%. A) 18% B) 14.4% C) 10%. D) 13.5%arrow_forwardCoffeeCarts has a cost of equity of 14.2%, has an effective cost of debt of 3.7%, and is financed 65% with equity and 35% with debt. What is this firm's WACC? CoffeeCarts's WACC is%. (Round to one decimal place.)arrow_forward
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