Question
Laurier Corp. has no debt but can borrow at 6.4%. The firms WACC is currently 9.5%, and the tax rate is 35%. (Do not round
Laurier Corp. has no debt but can borrow at 6.4%. The firms WACC is currently 9.5%, and the tax rate is 35%. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.) a. What is the companys cost of equity? Cost of equity % b. If the firm converts to 25% debt, what will its cost of equity be? Cost of equity % c. If the firm converts to 50% debt, what will its cost of equity be? Cost of equity % d-1. If the firm converts to 25% debt, what is the companys WACC? WACC % d-2. If the firm converts to 50% debt, what is the companys WACC? WACC %
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