Business, 18.07.2020 22:01 ernest214

Johansen Corporation has a target capital structure of 65 percent common stock and 35 percent debt. Its cost of equity is 14 percent, and the cost of debt is 8 percent. The relevant tax rate is 30 percent. What is the company's WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.) J&R Renovation, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has a coupon rate of 6 percent annually.

What is the company's pretax cost of debt?

If the tax rate is 35 percent, what is the aftertax cost of debt?

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