Question
Please help. Please do NOT NOT NOT use excel. Please do NOT NOT NOT Show in excel. Please do NOT show by handwriting. Please type
Please help. Please do NOT NOT NOT use excel. Please do NOT NOT NOT Show in excel. Please do NOT show by handwriting. Please type solutions. Please SHOW ALL WORK INCLUDING THE SMALL STEPS TO CALCULATE THE PROBLEM. PLEASE CALCULATE CAREFULLY. DO NOT put NPER, PMT, PV, FV, PLEASE SHOW FORMULAS. PLEASE SHOW STEP BY STEP. Please make sure you calculate everything and answered EACH part of the problem. PLEASE KEEP everything organized. THANK YOU SO MUCH!!!! :)
Fyre, Inc., has a target debtequity ratio of 1.55. Its WACC is 9.8 percent, and the tax rate is 40 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.) |
Cost of debt | % |
b. | If instead you know that the aftertax cost of debt is 6.8 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.) |
Cost of equity | % |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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