Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 02, 2024

A firm has a target debt-equity ratio of 0.45 . Its cost of equity is 14.5 percent, and its before tax cost of debt is

A firm has a target debt-equity ratio of 0.45 . Its cost of equity is 14.5 percent, and its before tax cost of debt is 8 percent. If the tax rate is 25 percent, what is the company's WACC? 11.86% 8.64% 12.48% 9.98%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

Let X1 and X2 be independent exponential random variables, each having rate . Let X(1) = minimum(X1, X2) and X(2) = maximum(X1, X2) Find (a) E[X(1)], (b) Var[X(1)], (c) E[X(2)], (d) Var[X(2)].

Answered: 1 week ago

Question

★★★★★

Valentine Investigations has the following information for its cash account: Balance, 1/31 ..............$ 5,030 Deposits during February ......... 93,160 Checks written during February ...... 92,270...

Answered: 1 week ago

Question

★★★★★

Classify each of the following Activities as Operating Inflow, Operating Outflow, Investing Inflow, ) Investing Outflow, Financing Inflow, or Financing Outflow a. Repayment of loans b. Loans made to...

Answered: 1 week ago

Question

★★★★★

On June 1, 2025, Cullumber Company sells $211,000 of shelving units to a local retailer, Oriole, which is planning to expand its stores in the area. Under the agreement, Oriole asks Cullumber to...

Answered: 1 week ago

Question

★★★★★

Figure P.13.3 shows the flight envelope at sea-level for an aircraft with a wing span of 27.5m, average wing chord 3.05m, and total weight 196kN. The aerodynamic center is 0.915 m forward of the...

Answered: 1 week ago

Question

★★★★★

4. You elect extended repayment of your student loan and must pay $474.80/month. Your interest rate is 4.06%. Correct to the nearest dollar, how much did you borrow? 5. How much would you save, in...

Answered: 1 week ago

Question

★★★★★

Data and data analysis form important parts within the Lean Six Sigma (LSS) framework. Within a LSS project, what are data and data analysis not used for? 1)Diagnose the current process. 2) Find the...

Answered: 1 week ago

Question

★★★★★

Dan owned a farm. Most of his products are being supplied to different restaurants. Products include cow's milk, chicken egg, meat (chicken, pork, and beef). On the side, they also sell carrots,...

Answered: 1 week ago

Question

★★★★★

Task 1: A. Describe the operation of the following thermodynamic systems and their properties: (i) System (ii) Surroundings (iii) Open System (iv) Close System (v) Isolated System B. A large fraction...

Answered: 1 week ago

Previous Question Next Question