Question
1. Suppose that TapDance, Inc.s, capital structure features 65 percent equity, 35 percent debt, and that its before-tax cost of debt is 7 percent, while
1. Suppose that TapDance, Inc.s, capital structure features 65 percent equity, 35 percent debt, and that its before-tax cost of debt is 7 percent, while its cost of equity is 12 percent. Assume the appropriate weighted average tax rate is 34 percent. |
What will be TapDances WACC? (Round your answer to 2 decimal places.) |
2. Suppose that MNINK Industries capital structure features 63 percent equity, 7 percent preferred stock, and 30 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 11.80 percent, 9.70 percent, and 9.00 percent, respectively. |
What is MNINKs WACC if the firm faces an average tax rate of 34 percent? (Round your answer to 2 decimal places.) |
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