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Unida Systems has 32 million shares outstanding trading for $9 per share. Inaddition, Unida has $109 million in outstanding debt. SupposeUnida's equity cost of capital
Unida Systems has 32 million shares outstanding trading for $9 per share. Inaddition, Unida has $109 million in outstanding debt. SupposeUnida's equity cost of capital is 18%, its debt cost of capital is 7%, and the corporate tax rate is 33%.
a. What isUnida's unlevered cost ofcapital?
b. What isUnida's after-tax debt cost ofcapital?
c. What isUnida's weighted average cost ofcapital?
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