Question

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? |

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 2 decimal places, e.g.,
32.16.) |

c-1. |
What would the cost of equity be if the debt-equity ratio were
2? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g.,
32.16.) |

c-2. |
What would the cost of equity be if the debt-equity ratio were
1.0? |

c-3. |
What would the cost of equity be if the debt-equity ratio were
zero? |

Answer #1

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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...

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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...

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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 1.3. 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...

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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...

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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...

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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...

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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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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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not round intermediate calculations. Enter your answer as...

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