David Ortiz Motors has a target capital structure of 30% debt and 70% equity.

David Ortiz Motors has a target capital structure of 30% debt and 70% equity.

WACCDavid Ortiz Motors has a target capital structure of 30% debt and 70% equity. The yield to maturity on the company’s outstanding bonds is 8%, and the company’s tax rate is 40%. Ortiz’s CFO has calculated the company’s WACC as 9.54%. What is the company’s cost of equity capital? Round your answer to two decimal places.____%Bond Yield and After-Tax Cost of DebtA company’s 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $693.01. The company’s federal-plus-state tax rate is 30%. What is the firm’s after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places._____%


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