Question
Irving Corp. has no debt but can borrow at 5.75 percent. The firm's WACC is currently 10 percent, and there is no corporate tax. a.
Irving Corp. has no debt but can borrow at 5.75 percent. The firm's WACC is currently 10 percent, and there is no corporate tax.
a.What is the company's cost of equity?(Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.)
b.If the firm converts to 20 percent debt, what will its cost of equity be?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)c.If the firm converts to 60 percent debt, what will its cost of equity be?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)d.What is the company's WACC in parts b) and c)?(Do not round intermediate calculations and enter your answers as a percent rounded to the nearest whole number, e.g., 32.)
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