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Dominic Industries has a debt-equity ratio of 1.5. Its WACC is 8.4%, and its cost of debt is 5.9%. The corporate tax rate is 21%.
Dominic Industries has a debt-equity ratio of 1.5. Its WACC is 8.4%, and its cost of debt is 5.9%. The corporate tax rate is 21%. a) What is the company's cost of equity capital? WACC = (E/V)RE + (D/V)R, (1 T) What is the company's unlevered cost of equity capital? Re = R + (R - R D /E)(1-T) 14.0000 c) What would the cost of equity be if the debt-equity ratio were 2? What if it were 1.0? What if it were zero
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