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No excel. Step by step 25. MM with Taxes Dickson, Inc., has a debt-equity ratio of 2.3. The firm's weighted average cost of capital is
No excel. Step by step
25. MM with Taxes Dickson, Inc., has a debt-equity ratio of 2.3. The firm's weighted average cost of capital is 9 percent and its pretax cost of debt is 5.3 percent. The tax rate is 24 percent. a. What is the company's cost of equity capital? b. What is the company's unlevered cost of equity capital? c. What would the company's weighted average cost of capital be if the firm's debt-equity ratio were 75 ? What if it were 1.3? 25. MM with Taxes Dickson, Inc., has a debt-equity ratio of 2.3. The firm's weighted average cost of capital is 9 percent and its pretax cost of debt is 5.3 percent. The tax rate is 24 percent. a. What is the company's cost of equity capital? b. What is the company's unlevered cost of equity capital? c. What would the company's weighted average cost of capital be if the firm's debt-equity ratio were 75 ? What if it were 1.3Step by Step Solution
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