What can you assume the yield on the debt

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1. Hull Inc.’s WACC is 12.25%. The company’s cost of equity is 18% and its cost of debt is 10%. If the tax rate is 40%, what is Hull’s target debt/equity ratio?

2. Gilder Inc. has a target debt/equity ratio of 1.4. Its WACC is 12% and the tax rate is 40%. If the pretax cost of debt is 8%, what is the cost of equity?

3. Royal Jewelers Inc. has an aftertax cost of debt of 11.75 percent. With a tax rate of 37 percent, what can you assume the yield on the debt is? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Reference no: EM131893355

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