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Solar Industries has a debt-equity ratio of 1.25. Its WACC Dickson Can 12700 sham n stock and 5250 is 7.8 percent, and its cost of

Solar Industries has a debt-equity ratio of 1.25. Its WACC

Dickson Can

12700 sham n

stock and 5250

is 7.8 percent, and its cost of debt is 4.7 percent. The corporate tax rate is 21 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 cost of equity be if the debt-equity ratio were 2? What if it were

1? What if it were zero?

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