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How much is the target total liabilities

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Question - Lancelin Manufacturing has a target debt-to-equity ratio of .35. It only has ordinary share for its equity. Its cost of equity is 12 percent, and its pre-tax cost of debt is 6 percent. The tax rate is 27.50 percent.

1. If the company's total equity is $2,500,000, how much is the target total liabilities?

2. How much is after-tax cost of equity?

3. How much is the after-tax cost of debt?

4. What is the company's WACC?

Reference no: EM132725950

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