13. 13. Calculating WACC [LO 16.1] Walla Walla Vineyards has no debt but can borrow at 6.1...
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13. 13.
Calculating WACC [LO 16.1] Walla Walla Vineyards has no debt but can borrow at 6.1 per cent. The firm’s WACC is currently 9.4 per cent and the tax rate is 30 per cent.
1. What is the company’s cost of equity?
2. If the firm converts to 25 per cent debt, what will its cost of equity be?
3. If the firm converts to 50 per cent debt, what will its cost of equity be?
4. What is the company’s WACC in part (b)? In part (c)?
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9781743768051
8th Edition
Authors: Stephen A. Ross, Rowan Trayler, Charles Koh, Gerhard Hambusch, Kristoffer Glover, Randolph W. Westerfield, Bradford D. Jordan
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