Question
Shadow Corp. has no debt but can borrow at 5.6 percent. The firm's WACC is currently 9.4 percentand the tax rate is 25 percent. a.
Shadow Corp. has no debt but can borrow at 5.6 percent. The firm's WACC is currently 9.4 percentand the tax rate is 25 percent.
a.What is the company's 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 35 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 65 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 35 percent debt, what is the company's 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 65 percent debt, what is the company's WACC?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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