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If Wild Widgets, Inc., were an all-equity company, it would have a beta of 1.8. The company has a target debtequity ratio of .2. The
If Wild Widgets, Inc., were an all-equity company, it would have a beta of 1.8. The company has a target debtequity ratio of .2. The expected return on the market portfolio is 8 percent, and Treasury bills currently yield 5.9 percent. The company has one bond issue outstanding that matures in 20 years and has a coupon rate of 10.8 percent. The bond currently sells for $1,270. The corporate tax rate is 35 percent. a. What is the companys cost of debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Cost of debt % b. What is the companys cost of equity? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Cost of debt % c. What is the companys weighted average cost of capital? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) WACC % check my workreferencesebook & resources
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