Question
Q.3 Unida Systems has 39 million shares outstanding trading for $10 per share. In addition, Unida has $86 million in outstanding debt. Suppose Unida's equity
Q.3 Unida Systems has 39 million shares outstanding trading for $10 per share. In addition, Unida has $86 million in outstanding debt. Suppose Unida's equity cost of capital is15%, its debt cost of capital is 8%, and the corporate tax rate is 35%.
a. What is Unida's unlevered cost of capital?
b. What is Unida's after-tax debt cost of capital?
c. What is Unida's weighted average cost of capital?
a. What is Unida's unlevered cost of capital?
Unida's unlevered cost of capital is_____________%.
(Round to one decimal place.)
b. What is Unida's after-tax debt cost of capital?
Unida's after-tax debt cost of capital is___________%.
(Round to one decimal place.)
c. What is Unida's weighted average cost of capital?
Unida's weighted average cost of capital is__________%.
(Round to one decimal place.)
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