Garnet, Inc., has a target debt-equity ratio of 0.49. Its WACC is 11.9%, and the tax rate

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Garnet, Inc., has a target debt-equity ratio of 0.49. Its WACC is 11.9%, and the tax rate is 39%

If you know that the after-tax cost of debt is 6.5%, what is the cost of equity? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).

Related Book For answer-question

Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

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Posted Date: May 15, 2024 09:30 PM

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Garnet, Inc., has a target debt-equity ratio of 0.49. Its WACC is 11.9%, and the tax rate

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Expert Answer:

To calculate the cost of equity we can use the formula for the weighted average cost of capital WACC ... View the full answer

Corporate Finance

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