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Dickson, Inc., has a debt-equity ratio of 2.5. The firms weighted average cost of capital is 11 percent and its pretax cost of debt is
Dickson, Inc., has a debt-equity ratio of 2.5. The firms weighted average cost of capital is 11 percent and its pretax cost of debt is 9 percent. The tax rate is 22 percent. |
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.) |
b. | What is the companys unlevered 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.) |
c. | What would the companys weighted average cost of capital be if the company's debt-equity ratio were .60 and 1.50? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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