Question

EU Corp. would like to have a 10.4 percent weighted average cost of capital. The company’s cost of equity is 12 percent, and its pre-tax cost of debt is 8.8 percent. The tax rate is 20 percent.

What is the company’s target debt–equity ratio?

Answer #1

EU Corp. would like to have a 10.4 percent weighted average cost
of capital. The company’s cost of equity is 12 percent, and its
pre-tax cost of debt is 8.8 percent. The tax rate is 20 percent.
What is the company’s target debt–equity ratio?

Fama’s Llamas has a weighted average cost of capital of 9.1
percent. The company’s cost of equity is 14 percent, and its pretax
cost of debt is 6.4 percent. The tax rate is 24 percent. What is
the company’s target debt-equity ratio? (Do not round intermediate
calculations and round your answer to 4 decimal places, e.g.,
32.1616.)

Fama’s Llamas has a weighted average cost of capital of 9.9
percent. The company’s cost of equity is 13.5 percent, and its cost
of debt is 8.1 percent. The tax rate is 24 percent. What is the
company’s debt-equity ratio?

Fama’s Llamas has a weighted average cost of capital of 9.4
percent. The company’s cost of equity is 13 percent, and its cost
of debt is 7.6 percent. The tax rate is 24 percent. What is the
company’s debt-equity ratio?

Fama’s Llamas has a weighted average cost of capital of 9.1
percent. The company’s cost of equity is 12.7 percent, and its cost
of debt is 7.3 percent. The tax rate is 21 percent. What is the
company’s debt-equity ratio?

Fama’s Llamas has a weighted average cost of capital of 9.3
percent. The company’s cost of equity is 12.9 percent, and its cost
of debt is 7.5 percent. The tax rate is 23 percent. What is the
company’s debt-equity ratio? (Do not round intermediate
calculations and round your answer to 4 decimal places, e.g.,
32.1616.)

Fama's Llamas has a weighted average cost of capital of 9
percent. The company's cost of equity is 16 percent, and its pretax
cost of debt is 10 percent. The tax rate is 36 percent. What is the
company's target debt-equity ratio?

Target Capital structure
Fama's Lama has a weighted average cost of capita of 10%. The
company's cost of equity is 12%, pre tax cost of debt is 8%. If the
tax rate is 0% then what is the target debt to equtiy ratio?

Fama's Llamas has a weighted average cost of capital of 9
percent. The company's cost of equity is 15 percent, and its pretax
cost of debt is 10 percent. The tax rate is 36 percent. What is the
company's target debt-equity ratio?
(Do not round intermediate calculations and round your
final answer to 2 decimal places. For example, 1.2345 should be
entered as 1.23.)

Dickson, Inc., has a debt-equity ratio of 2.35. The firm's
weighted average cost of capital is 12 percent and its pretax cost
of debt is 9 percent. The tax rate is 24 percent.
What is the company's cost of equity capital?
What is the unlevered cost of equity capital?
What would the company's weighted average cost of capital be if
the company's debt-equity ratio were .75 and 1.35?
Please answer this in Excel, thank you

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