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Blitz Industries has a debt-equity ratio of .9. Its WACC is 8.8 percent, and its cost of debt is 6.3 percent. The corporate tax rate

Blitz Industries has a debt-equity ratio of .9. Its WACC is 8.8 percent, and its cost of debt is 6.3 percent. The corporate tax rate is 25 percent.

a)What is the companys cost of equity capital?

b) What is the companys unlevered cost of equity capital?

c) What would the cost of equity be if the debt-equity ratio were 2?

Can you please explain why the WACC formula cannot also be used to find the cost of equity in part c? Thank you!

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