Question

If the WACC of a company is 8.9 per cent and cost of Equity is 12...

If the WACC of a company is 8.9 per cent and cost of Equity is 12 and cost of Debt is 7.9 per cent and it's tax rate is 35 per cent then what is the company's debt to equity ratio. Please provide detailed workings

Homework Answers

Answer #1

­

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

debt equity ratio = 0.8234 = 82.34%

As nothing was mentioned, answer is provided in decimals and also % form

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
7. A company has a target debt-to-equity ratio of 1.36. Its WACC is 11.46%, and the...
7. A company has a target debt-to-equity ratio of 1.36. Its WACC is 11.46%, and the tax rate is 35%. If the company's cost of equity is 17.66%, what is its pre-tax cost of debt?
Company Y has WACC of 11 %. The cost of equity capital is 14% and pretax...
Company Y has WACC of 11 %. The cost of equity capital is 14% and pretax cost of debt is 2%. Company tax rate is 35%. Calculate the equity to firm value ratio (E/V). Calculate the debt to equity ratio (D/E). I leave A like !
WB Industries has a debt-equity ratio of .8. Its WACC is 9.2 percent, and its cost...
WB Industries has a debt-equity ratio of .8. Its WACC is 9.2 percent, and its cost of debt is 4.9 percent. The corporate tax rate is 35 percent. What is the company's cost of equity capital? What is the above company's unlevered cost of equity capital? What would the cost of equity be if the debt-equity ratio were .95?
Sixx AM Manufacturing has a target debt-equity ratio of 0.52. Its cost of equity is 12...
Sixx AM Manufacturing has a target debt-equity ratio of 0.52. Its cost of equity is 12 percent, and its cost of debt is 7 percent. If the tax rate is 36 percent, what is the company's WACC?
Compute the WACC when cost of equity = 0.14 cost of debt = 0.06 debt ratio...
Compute the WACC when cost of equity = 0.14 cost of debt = 0.06 debt ratio = 0.35 tax rate = .35
Starset, Inc., has a target debt-equity ratio of 0.87. Its WACC is 10 percent, and the...
Starset, Inc., has a target debt-equity ratio of 0.87. Its WACC is 10 percent, and the tax rate is 34 percent.       If the company's cost of equity is 15.5 percent, what is the pretax cost of debt? 5.57% 13.91% 7.9% 6.24% 5.31% If instead you know that the aftertax cost of debt is 6.9 percent, what is the cost of equity? 12.7% 30.75% 13.56% 13.21% 12.19%
Blitz Industries has a debt-equity ratio of .7. Its WACC is 8.9 percent, and its cost...
Blitz Industries has a debt-equity ratio of .7. Its WACC is 8.9 percent, and its cost of debt is 6.2 percent. The corporate tax rate is 21 percent.    a. What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded...
Weston Industries has a debt-equity ratio of .7. Its WACC is 8.9 percent, and its cost...
Weston Industries has a debt-equity ratio of .7. Its WACC is 8.9 percent, and its cost of debt is 6.2 percent. The corporate tax rate is 21 percent.    a. What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded...
Blitz Industries has debt-equity ratio of 1.3. Its WACC is 8.5 percent, and its cost of...
Blitz Industries has debt-equity ratio of 1.3. Its WACC is 8.5 percent, and its cost of debt is 6.2 percent. The corporate tax rate is 22 percent. What is the company's cost of equity capital? What is the company's unlevered cost of equity capital? What would the cost of equity be if the debt-equity ratio were 2, 1.0, and 0?
Kountry Kitchen has a cost of equity of 11.700 percent, a pretax cost of debt of...
Kountry Kitchen has a cost of equity of 11.700 percent, a pretax cost of debt of 6.300 percent, and the tax rate is 35 percent. If the company's WACC is 8.9200 percent, what is its debt–equity ratio?