The Beta Corporation has an optimal debt ratio of 45 percent. Its cost of equity capital is 12 percent, and its before-tax borrowing rate is 6 percent. Given a marginal tax rate of 35 percent.

Required:

1. Calculate the weighted-average cost of capital.
2. Calculate the cost of equity for an equivalent all-equity financed firm.

The Beta Corporation has an optimal debt ratio of 45 percent. Its cost of equity capital is 12 percent, and its before-tax borrowing rat is 6 percent. Given a marginal tax rate of 35 percent. Required: a. Calculate the weighted-average cost of capital. b. Calculate the cost of equity for an equivalent all-equity financed firm. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Calculate the cost of equity for an equivalent all-equity financed firm. Note: Do not round intermediate calculations. Round your answer as a percent rounded to 2 decimal places