Question

WB Industries has a debt-equity ratio of .8. Its WACC is 9.2 percent, and its cost...

WB Industries has a debt-equity ratio of .8. Its WACC is 9.2 percent, and its cost of debt is 4.9 percent. The corporate tax rate is 35 percent. What is the company's cost of equity capital? What is the above company's unlevered cost of equity capital? What would the cost of equity be if the debt-equity ratio were .95?

Homework Answers

Answer #1

Detailed solution is provided.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
WB Industries has a debt-equity ratio of .8. Its WACC is 9.2 percent, and its cost...
WB Industries has a debt-equity ratio of .8. Its WACC is 9.2 percent, and its cost of debt is 4.9 percent. The corporate tax rate is 35 percent. What would the cost of equity be if the debt-equity ratio were .95? 12.84% 15.83% 14.58% 22.59% 23.45%
Blitz Industries has debt-equity ratio of 1.3. Its WACC is 8.5 percent, and its cost of...
Blitz Industries has 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. What is the company's cost of equity capital? What is the company's unlevered cost of equity capital? What would the cost of equity be if the debt-equity ratio were 2, 1.0, and 0?
3. Maxwell Industries has a debt– equity ratio of 1.5. Its WACC is 11 percent, and...
3. Maxwell Industries has a debt– equity ratio of 1.5. Its WACC is 11 percent, and its cost of debt is 8 percent. The corporate tax rate is 35 percent. a. What is Maxwell’s cost of equity capital? b. What is Maxwell’s unlevered cost of equity capital?
Weston Industries has a debt-equity ratio of 1.8. Its WACC is 14 percent, and its cost...
Weston Industries has a debt-equity ratio of 1.8. Its WACC is 14 percent, and its cost of debt is 12 percent. The corporate tax rate is 36 percent. (Round your answers to 2 decimal places. (e.g., 32.16))    Required: a. Weston’s cost of equity capital is __x__ percent.    b. Weston’s unlevered cost of equity capital is __y__ percent.    c. The cost of equity would be __z__ percent if the debt-equity ratio were 2, __xx__ percent if the debt-equity...
Skillet Industries has a debt–equity ratio of 1.1. Its WACC is 7.0 percent, and its cost...
Skillet Industries has a debt–equity ratio of 1.1. Its WACC is 7.0 percent, and its cost of debt is 5.6 percent. The corporate tax rate is 35 percent.    a. What is the company’s cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16))      Cost of equity capital %   b. What is the company’s unlevered cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16))      Unlevered cost of equity capital %     ...
Weston Industries has a debt-equity ratio of 1.2. Its WACC is 7.4 percent, and its cost...
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...
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...
Weston Industries has a debt–equity ratio of 1.4. Its WACC is 9.4 percent, and its pretax...
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 1.2. Its WACC is 9 percent, and its...
Twice Shy Industries has a debt−equity ratio of 1.2. Its WACC is 9 percent, and its cost of debt is 5.7 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 %   b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations. Enter your...
Twice Shy Industries has a debt−equity ratio of 1.4. Its WACC is 9.4 percent, and its...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT