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If Wild Widgets Inc. were an all-equity company, it would have a beta of 1.80 . The company has a target debt-to-equity ratio of 0.2
If Wild Widgets Inc. were an all-equity company, it would have a beta of 1.80 . The company has a target debt-to-equity ratio of 0.2 . 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 10.8 percent coupon rate. The bond currently sells for $1,270. The corporate tax rate is 35 percent a. What is the company's cost of debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit \% sign in your response.) Cost of debt % b. What is the company's cost of equity? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit % sign in your response.) Cost of equity % c. What is the company's WACC? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit \% sign in your response.) WACC %
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