Crosby Industries has a debtequity ratio of 1.2. Its WACC is 11 percent, and its cost of debt is 5 percent. There is no corporate tax. a. What is the companys 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 % b. What would the cost of equity be if the debtequity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Cost of equity % What would the cost of equity be if the debtequity ratio were .7? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity % What would the cost of equity be if the debtequity ratio were zero? (Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Cost of equity %

Hints

References

eBook & Resources