Pretax cost of debt-garnet inc

Assignment Help Finance Basics
Reference no: EM132499447

Garnet, Inc., has a target debt-equity ratio of 0.51. Its WACC is 11.9%, and the tax rate is 31%. If Garnet's cost of equity is 14%, what is its pretax cost of debt? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).

Reference no: EM132499447

Questions Cloud

Calculate the annual depreciation amount under capital cost : Calculate the annual depreciation amount for 2020 and 2021 under the activity method. (Round per unit value to 2 decimal places e.g. 5.75)
What are the benefits of banking regulations : What are the benefits of banking regulations? What are the disadvantages of banking regulations?
Analyze the articles based on what you have learned : Analyze the articles based on what you have learned so far in this class and write a short reaction essay for each one. Each essay must be at least one page.
What is a good justification to hold shares : What is a good justification to hold shares and investment thesis for Westpac shares? Including numbers and ratios
Pretax cost of debt-garnet inc : Garnet, Inc., has a target debt-equity ratio of 0.51. Its WACC is 11.9%, and the tax rate is 31%. If Garnet's cost of equity is 14%
Describe what the outcome would be : Describe what the outcome would be. If your proposal were implemented, how would things be different? In particularly, how would they be better than they.
What is meant by sufficient appropriate audit evidence : Explain whether sufficient appropriate audit evidence has been obtained for each of the above situations. Give reasons for your answer.
What is maverick wacc : Maverick Manufacturing has a target debt-equity ratio of 0.53. Its cost of equity is 11%, and its cost of debt is 7%. If the tax rate is 31%, what is Maverick's
Calculate western investment group share price : Using the constant dividend growth model, calculate Western Investment Group's share price (P). Give your answer in dollars and cents to the nearest cent.

Reviews

Write a Review

Finance Basics Questions & Answers

  You have just won a lottery you will receive 50000 a year

you have just won a lottery you will receive 50000 a year beginning one year from now for 20 years. if your required

  How much cash did wing corporation receive from its ipo

The gross spread is $4. After completing their sales efforts the underwriters determine that they were able to sell a total of 33,750 shares. How much cash did Wing Corporation receive from its IPO?

  What is the price of bonds

There are 8 coupon payments of $81 each starting a year from now, and the last payment 8 years from now is coupon plus face.

  Relationships between capital costs and leverage

Assume that Firms U and L are in the same risk class and that both have . Firm U uses no debt financing, and its cost of equity is . Firm L has

  A firm has free cash flow to the firm

A firm has free cash flow to the firm equal to $150 million in year 1 and that cash flow is expected to grow at 2% forever. What is the value of share of stock, if WACC is 9.5%, cost of equity is 12%, the value of debt is $500 million and there are 1..

  Method of evaluating the cash flows from a project

Why is NPV considered to be a superior method of evaluating the cash flows from a project? Suppose the NPV for a project's cash flows is computed to be $2,500.

  Calculate the fv of the annuity at the end of the deposit

calculate the fv of the annuity at the end of the deposit period assuming that the annuity cash flows occur at the end

  Find the irr of the project

Find the payback period of a project that costs $2000 and generates $500 in the 1st year, $700 in the 2nd year, $800 in the 3rd year, $600 in the 4th year.

  How offshore outsourcing integrates national economies

A short definition of globalization is "the growing liberalization of international trade and investment, and the resulting increase in the integration of national economies." Discuss how offshore outsourcing integrates national economies.

  Determining the strategic business partner

Also, what are the disadvantages for organizations that do not view HR as a strategic business partner? Please cite any resources you utilize.

  Dollar size of the issue

D. Butler Inc. needs to raise $14 million. Assuming that the market price of the firm's stock is $95, and flotation costs are 10 percent of the market price, how many shares would have to be issued? What is the dollar size of the issue?

  Suppose there is a financial asset abc which is the

suppose there is a financial asset abc which is the underlying asset for a futures contract with settlement six months

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd