Question

Crosby Industries has a debt–equity ratio of 1.4. Its WACC is 14
percent, and its cost of debt is 9 percent. There is no corporate
tax.

**a.** What is the company’s cost of equity capital?
**(Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g.,
32.16.)**

Cost of equity %

Cost of equity %

What would the cost of equity be if the debt–equity ratio were .4?

Cost of equity %

What would the cost of equity be if the debt–equity ratio were zero?

Cost of equity %

Answer #1

Blitz Industries has a debt-equity ratio of 1.4. Its WACC is 7.6
percent, and its cost of debt is 5.3 percent. The corporate tax
rate is 24 percent.
a.
What is the company’s cost of equity capital? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
b.
What is the company’s unlevered cost of equity capital?
(Do not round intermediate calculations and enter your
answer as a percent rounded...

Weston Industries has a debt–equity ratio of 1.4. Its WACC is
9.4 percent, and its pretax cost of debt is 6.7 percent. The
corporate tax rate is 35 percent.
a.
What is the company’s cost of equity capital? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
Cost of equity capital
%
b.
What is the company’s unlevered cost of equity capital?
(Do not round intermediate calculations and...

Twice Shy Industries has a debt−equity ratio of 1.4. Its WACC is
9.4 percent, and its cost of debt is 6.7 percent. The corporate tax
rate is 35 percent.
a. What is the company’s cost of equity capital? (Do not round
intermediate calculations. Enter your answer as a percent rounded
to 2 decimal places, e.g., 32.16.) Cost of equity capital
16.46%
b. What is the company’s unlevered cost of equity capital? (Do
not round intermediate calculations. Enter your answer as...

Blitz Industries has a debt-equity ratio of .7. Its WACC is 8.9
percent, and its cost of debt is 6.2 percent. The corporate tax
rate is 21 percent.
a.
What is the company’s cost of equity capital? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
b.
What is the company’s unlevered cost of equity capital?
(Do not round intermediate calculations and enter your
answer as a percent rounded...

Weston Industries has a debt-equity ratio of .7. Its WACC is 8.9
percent, and its cost of debt is 6.2 percent. The corporate tax
rate is 21 percent.
a.
What is the company’s cost of equity capital? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
b.
What is the company’s unlevered cost of equity capital?
(Do not round intermediate calculations and enter your
answer as a percent rounded...

Weston Industries has a debt-equity ratio of 1.7. Its WACC is
7.9 percent, and its cost of debt is 5.6 percent. The corporate tax
rate is 22 percent.
a.
What is the company’s cost of equity capital? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
b.
What is the company’s unlevered cost of equity capital?
(Do not round intermediate calculations and enter your
answer as a percent rounded...

Weston Industries has a debt-equity ratio of 1.1. Its WACC is
7.3 percent, and its cost of debt is 5.1 percent. The corporate tax
rate is 21 percent.
a.
What is the company’s cost of equity capital? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
b.
What is the company’s unlevered cost of equity capital?
(Do not round intermediate calculations and enter your
answer as a percent rounded...

Weston Industries has a debt-equity ratio of 1.3. Its WACC is
8.5 percent, and its cost of debt is 6.2 percent. The corporate tax
rate is 22 percent.
a. What is the company’s cost of equity capital? (Do not round
intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
b. What is the company’s unlevered cost of equity capital? (Do
not round intermediate calculations and enter your answer as a
percent rounded to...

Weston Industries has a debt-equity ratio of 1.2. Its WACC is
7.4 percent, and its cost of debt is 5.1 percent. The corporate tax
rate is 22 percent. a. What is the company’s cost of equity
capital? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.) b.
What is the company’s unlevered cost of equity capital? (Do not
round intermediate calculations and enter your answer as a percent
rounded to...

Twice Shy Industries has a debt?equity ratio of 1.6. Its WACC is
8.4 percent, and its cost of debt is 6.9 percent. The corporate tax
rate is 35 percent.
a.
What is the company’s cost of equity capital? (Do not
round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
Cost of equity
capital
%
b.
What is the company’s unlevered cost of equity capital?
(Do not round intermediate calculations. Enter your...

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