Butler, Inc., has a target debt-equity ratio of 1.40. Its WACC is 9.5 percent, and the tax rate is 23 percent.   a. If the company’s cost of equity is 13.3 percent, what is its pretax cost of debt? (Do not round intermediate calculations and 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 5.5 percent, what is the cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)   a. Pretax cost of debt:____% b. Cost of equity:____%

Q: Starset, Incorporated, has a target debt-equity ratio of 0.76. Its WACC is 10.5 percent, and the tax…

A: Pretax cost of debt can be calculated through the WACC equation and debt-equity ratio. Here…

Q: Bulldogs Inc., which has 20% income tax rate, is funded by debt and common equity. The equity ratio…

A: Calculation of the cost of after tax cost of debt:: We know that weighted average cost of capital is…

Q: Suppose that TapDance, Inc.’s capital structure features 65 percent equity, 35 percent debt, and…

A: WACC = (Weight of common stock * Cost of common equity) + [Weight of debt * Pretax cost of debt(1 -…

Q: Targaryen Corporation has a target capital structure of 65 percent common stock, 5 percent preferred…

A: Capital structure of Common stock is 65%  Capital structure of Preferred stock is 5% Capital…

Q: Baron Corporation has a target capital structure of 70 percent common stock, 5 percent preferred…

A: In the given question we need to compute the Baron Corporation WACC and after tax cost of debt.

Q: Baron Corporation has a target capital structure of 60 percent common stock, 5 percent preferred…

A: Target Capital Structure = 60% stock, 5% preferred stock, 35% debt Cost of equity = 11% cot of…

Q: Caddie Manufacturing has a target debt-equity ratio of .75. Its cost of equity is percent, and its…

A: The cost of capital is the rate of return that a company gives on all its capital whether it is…

Q: Targaryen Corporation has a target capital structure of 75 percent common stock, 10 percent…

A: Given information: Cost of equity is 10%, Cost of preferred stock is 6%, Pre-tax cost of debt is 7%,…

Q: Braxton Corp. currently has one million shares outstanding but no debt. If needed, however, the…

A: Please find the answers to the above questions below:

Q: Baron Corporation has a target capital structure of 60 percent common stock, 5 percent preferred…

A: Given: Cost of equity = 9% Cost of preferred stock = 7% Cost of debt = 8% Tax rate = 21%

Q: Blue Co. is funded only by debt and equity with a weighted average cost of capital at 20%. The debt…

A: Weighted average cost of capital (WACC) = 20% Debt ratio = Weight of debt (Wd) = 20% or 0.2 Weight…

Q: Baron Corporation has a target capital structure of 60 percent common stock, 5 percent preferred…

A: Solution: Weighted Average Cost of Capital (WACC) is the minimum rate of return required by the…

Q: Croft Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its…

A: Common stock ratio (E) = 70% Debt ratio (D) = 30% Cost of equity (Ke) = 16% Cost of debt (Kd) = 8%…

Q: Fama's Llamas has a weighted average cost of capital of 9.5 percent. The company's cost of equity is…

A: Calculation of Target Debt-Equity Ratio:The target debt-equity ratio is 0.91.Excel Spreadsheet:

Q: Ninecent Corporation has a target capital structure of 60 percent common stock, 5 percent preferred…

A: Capital Weight Cost of capital before tax Common stock 60% 10% Preferred stock 5% 5% Debt 35%…

Q: Solar Industries has a debt-equity ratio of 1.5. Its WACC is 7.7 percent, and its cost of debt is…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Blitz Industries has a debt-equity ratio of 1.7. Its WACC is 8.1 percent, and its cost of debt is…

A: Data given : Debt-equity ratio = 1.7:1 WACC = 8.1% Cost of debt = 5.7% Corporate tax rate = 23%

Q: Lannister Manufacturing has a target debt-equity ratio of 0.66. Its cost of equity is 16 percent,…

A: Weighted average cost of capital can be calculated as: = (Weight of equity * Cost of equity) +…

Q: rbitrary FirmName Ltd has a target debt-equity ratio of 1.20. Its weighted average cost of capital…

A: Weighted Average cost of capital is sum product of cost of each component in capital structure and…

Q: the backwoods lumber co. has a debt equity ratio of .80. the firm's required return on assets is 12%…

A: Debt to equity ratio is 0.8, required return is 12% and cost of equity is 15.68%Since, debt / equity…

Q: Braxton Corp. currently has one million shares outstanding but no debt. If needed, however, the…

A: WACC = Weight in Equity * Cost of equity + Weight in debt *Cost of debt * (1- tax)

Q: Bento, Inc., has a target debt-equity ratio of .65. Its cost of equity is 16 percent, and its cost…

A: Debt to Equity ratio = 0.65 So, let Debt = 65 ; Equity  =100; Total capital  =165 Weight of debt =…

Q: Suppose that TapDance, Inc.’s capital structure features 70 percent equity, 30 percent debt, and…

A: To calculate the WACC we will use the below formula   WACC = [Kd*(1-t)*Wd]+[Ke*We] Where Kd - Before…

Q: Targaryen Corporation has a target capital structure of 60 percent common stock, 5 percent preferred…

A: given, wcommon stock = 0.6 wpreferred= 0.05 wdebt= 0.35 requity= 9% rpreferred= 7% rdebt= 8% tax =…

Q: Croft Corporation has a target capital structure of 85 percent common stock and 15 percent debt. Its…

A: WACC = Cost of debt * Weight of debt + Cost of equity * Weight of equity

Q: Suppose that TapDance, Inc.'s capital structure features 60 percent equity, 40 percent debt, and…

A: Equity ratio = 60% Debt ratio = 40% Cost of equity = 11% Before tax cost of debt = 6% Tax rate = 21%…

Q: 1. Jorge Ricard, a fi nancial analyst, is estimating the costs of capital for the Zeale Corporation.…

A: Answer 1: Information Provided; Cost of debt = 4% Cost of equity = 6% Marginal Tax rate 20% 45%

Q: Precision Cuts has a target debt-equity ratio of .48. Its cost of equity is 16.4 percent, and its…

A: To calculate the WACC we will use the below formula   WACC = (Ke*We)+[Kd*(1-t)*Wd]   Where Ke - Cost…

Q: Lannister Manufacturing has a target debt-equity ratio of 0.62. Its cost of equity is 18 percent,…

A: Target debt to equity = 0.62Therefore,Debt to total asset (D/V) = 0.62/1.062 =…

Q: Sunrise, Incorporated, Is trying to determine its cost of debt. The firm has a debt issue…

A: Before tax cost of debt is yield to maturity of debt that is the rate which is given by debt when it…

Q: Clifford, Inc., has a target debt-equity ratio of .80. Its WACC is 9.1 percent, and the tax rate is…

A: WACC is a weighted average cost of all the sources of capital. It is equal to the sum of products of…

Q: You were hired as a consultant to ABC Company, whose target capital structure is 35% debt, 15%…

A: The Weighted average cost of capital(WACC) is the average cost of capital, in which each category of…

Q: Lannister Manufacturing has a target debt-equity ratio of .85. Its cost of equity is 10 percent, and…

A: Debt Equity ratio = .85 DebtEquity=.85 Debt = 0.85 x Equity   Calculate the weight for debt and…

Q: ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding…

A: Cost of Debt refers to cost incurred by an entity for having debt fund in capital structure.

Q: Blitz Industries has a debt-equity ratio of 1.2. Its WACC is 7.4 percent, and its cost of debt is…

A: a.Calculation of Cost of Equity Capital:The cost of equity capital is 11.51%.

Q: Croft Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its…

A: WACC = [Cost of debt x (1 - tax rate) x debt %] + (Cost of equity x Equity %)

Q: what is the weighted average cost of capital?

A: Information Provided: Cost of equity = 12.8% YTM on bonds = 5.3% Tax rate = 35% Debt-Equity ratio =…

Q: Fama’s Llamas has a weighted average cost of capital of 8.4 percent. The company’s cost of equity is…

A: The formula used is shown:

Q: Suppose that TapDance, Inc.'s capital structure features 65 percent equity, 35 percent debt, and…

A: WACC = (Market weight of equity × Cost of equity) + (Market value of debt × post tax Cost of debt)

Q: Need help with both questions

A: Calculate the cost of debt as follows:

Q: Upton Umbrellas has a cost of equity of 12.6 percent, the YTM on the company's bonds is 5.7 percent,…

A: Calculating the market value of debt and equity. We have,(a) Market value of debt = Book value of…

Q: Sunrise, Incorporated, is trying to determine its cost of debt. The firm has a debt issue…

A: Given: Particulars   Years 23 Coupon 5% Completed years 0 Current price 96% Par value…

Q: Mint Industries has a target debt-equity ratio of 0.60, a cost of equity of 10%, and one issue of…

A: WACC of the company is calculated as sum of weighted cost of capital of each source

Q: Branson Manufacturing has a target debt-equity ratio of .55. Its cost of equity is 10 percent, and…

A: Given, The Target debt-equity ratio is 0.55 Cost of equity is 10%Pre-tax cost of debt is 6% Tax rate…

Q: A firm has a return on assets of 7.8 percent and a cost of equity of 11.9 percent. What is the…

A: The return on assets will be the weighted average cost of capital(WACC) which can be calculated by…