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Dickson, Incorporated, has a debt - equity ratio of 2 . 1 5 . The firm's weighted average cost of capital is 8 percent


Dickson, Incorporated, has a debt-equity ratio of 2.15 . The firm's weighted average cost of capital is 8 percent and its pretax cost of debt is 5 percent. The tax rate is 25 percent.

a. What is the company's cost of equity capital?

b. What is the company's unlevered cost of equity capital?


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a Companys Cost of Equity Capital We can use the MillerModigliani MM capital structure formula to ca... blur-text-image

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