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Dickson, Inc., has a debt-equity ratio of 2.8. The firms weighted average cost of capital is 9 percent and its pretax cost of debt is
Dickson, Inc., has a debt-equity ratio of 2.8. The firms weighted average cost of capital is 9 percent and its pretax cost of debt is 5 percent. The tax rate is 23 percent. |
a. | What is the companys cost of equity capital? |
b. | What is the companys unlevered cost of equity capital? |
c. | What would the companys weighted average cost of capital be if the company's debt-equity ratio were .30 and 1.80? |
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