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Need assistance with Part C. My calculations of WACC at .80 (15.04%) and 1.7 (11.53%) were incorrect. Thank you. Williamson, Inc., has a debt-equity ratio
Need assistance with Part C. My calculations of WACC at .80 (15.04%) and 1.7 (11.53%) were incorrect. Thank you.
Williamson, Inc., has a debt-equity ratio of 2.45. The company's weighted average cost of capital is 10 percent, and its pretax cost of debt is 6 percent. The corporate tax rate is 25 percent. a. What is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company's unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What would the weighted average cost of capital be if the company's debt-equity ratio were .80 and 1.70 ? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)Step by Step Solution
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