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Brown Industries has a debt-equity ratio of 11. Its WACC is 13 percent, and its cost of debt is 4 percent. There is no corporate
Brown Industries has a debt-equity ratio of 11. Its WACC is 13 percent, and its cost of debt is 4 percent. There is no corporate tax. e.g., 32.16.) 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, b-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 the nearest whole number, e.g., 32.) b-2. What would the cost of equity be if the debt equity ratio were.5? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-3. What would the cost of equity be if the debt-equity ratio were zero? (Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g. 32.) Answer is complete but not entirely correct. 8 60 X % a. b- 1. Cost of equity Cost of equity 5 % Cost of equity (7.00) X % 2. b- 3 Cost of equity 13
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