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If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.3. WWI has a target debt/equity ratio of 0.4. The
If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.3. WWI has a target debt/equity ratio of 0.4. The expected return on the market is 0.17, and Treasury bills are currently selling to yield 0.05. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 6% and are selling for $911.6. The corporate tax rate is 30%.(Round your answers to 2 decimal places before the percentage sign. (e.g., 10.23%)) |
a. | WWIs before-tax cost of debt is %. |
b. | WWIs cost of equity is %. |
c. | WWIs weighted average cost of capital is |
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