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Unida Systems has 36 million shares outstanding trading for $10 per share. In addition, Unida has $98 million in outstanding debt. Suppose Unida's equity cost
Unida Systems has 36 million shares outstanding trading for $10 per share. In addition, Unida has $98 million in outstanding debt. Suppose Unida's equity cost of capital is 14%, its debt cost of capital is 8%, and the corporate tax rate is 37%. 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 12.7 %. (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 5.04 %. (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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