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Crowley Company has a capital structure with 35% debt at a 9% interest rate.Its beta is 1.3, the risk-free rate is 1.5%, and the market
Crowley Company has a capital structure with 35% debt at a 9% interest rate.Its beta is 1.3, the risk-free rate is 1.5%, and the market risk premium is 10%.The company has no preferred stock.Its combined federal-plus-state tax rate is 25%.
a. Calculate the company's cost of equity =
b. Calculate the company's weighted average cost of capital =
c. Calculate the company's unlevered cost of equity =
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There are 3 Steps involved in it
Step: 1
a To calculate the companys cost of equity Ke we can use the Capital Asset Pricing Model CAPM formul...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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