Question
16- Twice Shy Industries has a debtequity ratio of 1.8. Its WACC is 8.3 percent, and its cost of debt is 6.3 percent. The corporate
16-
Twice Shy Industries has a debtequity ratio of 1.8. Its WACC is 8.3 percent, and its cost of debt is 6.3 percent. The corporate tax rate is 35 percent. |
a. | What is the companys 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 companys unlevered cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Unlevered cost of equity capital | % |
c-1 | What would the cost of equity be if the debtequity ratio were 2? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Cost of equity | % |
c-2 | What would the cost of equity be if the debtequity ratio were 1.0? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Cost of equity | % |
c-3 | What would the cost of equity be if the debtequity ratio were zero? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Cost of equity | % |
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