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Fyre, Inc., has a target debtequity ratio of 1.30. Its WACC is 9.3 percent, and the tax rate is 38 percent. a. If the companys
Fyre, Inc., has a target debtequity ratio of 1.30. Its WACC is 9.3 percent, and the tax rate is 38 percent. |
a. | If the companys cost of equity is 15 percent, what is its pretax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
b. | If instead you know that the aftertax cost of debt is 6.2 percent, what is the cost of equity? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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