Question
Navarro Corporation has no debt but can borrow at 5.2 percent. The firms WACC is currently 8.9 percent and the tax rate is 24 percent.
| Navarro Corporation has no debt but can borrow at 5.2 percent. The firms WACC is currently 8.9 percent and the tax rate is 24 percent. |
| a. | What is the companys cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b. | If the firm converts to 25 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 45 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-1. | If the firm converts to 25 percent debt, what is the companys WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| d-2. | If the firm converts to 45 percent debt, what is the companys WACC? |
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Profit First For Lawn Care And Landscape Businesses
Authors: Christeen Era, Steven A Rigolosi, Mike Michalowicz
1st Edition
0578908158, 978-0578908151
