Question
Skillet Industries has a debtequity ratio of 1.8. Its WACC is 8.3 percent, and its cost of debt is 6.3 percent. The corporate tax rate
Skillet Industries has a debtequity ratio of 1.8. Its WACC is 8.3 percent, and its cost of debt is 6.3 percent. The corporate tax rate is 35 percent.
a. What is the companys cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16)) Cost of equity capital %
b. What is the companys unlevered cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16)) Unlevered cost of equity capital %
c-1 What would the cost of equity be if the debtequity ratio were 2? (Round your answer to 2 decimal places. (e.g., 32.16)) Cost of equity %
c-2 What would the cost of equity be if the debtequity ratio were 1.0? (Round your answer to 2 decimal places. (e.g., 32.16)) Cost of equity %
c-3 What would the cost of equity be if the debtequity ratio were zero? (Round your answer to 2 decimal places. (e.g., 32.16)) Cost of equity %
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