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Dickson, Inc., has a debt-equity ratio of 2.55. The firm's weighted average cost of capital is 12 percent and its pretax cost of debt is
Dickson, Inc., has a debt-equity ratio of 2.55. The firm's weighted average cost of capital is 12 percent and its pretax cost of debt is 10 percent. The tax rate is 23 percent. 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, e.g., 32.16.) b. What is the company's 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 company's weighted average cost of capital be if the company's debt- equity ratio were 55 and 1.55? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of equity b. Unlevered cost of equity WACC if debt-equity ratio = 0.55 WACC if debt-equity ratio = 1.55 C. % % %
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