Question
Crosby Industries has a debtequity ratio of 1.5. Its WACC is 10 percent, and its cost of debt is 5 percent. There is no corporate
Crosby Industries has a debtequity ratio of 1.5. Its WACC is 10 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 .6? (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 %
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