Question
Unlevered Cost of Equity Elliott's Cross Country Transportation Services has a capital structure with 25% debt at a 9% interest rate. Its beta is 1.7,
Unlevered Cost of Equity
Elliott's Cross Country Transportation Services has a capital structure with 25% debt at a 9% interest rate. Its beta is 1.7, the risk-free rate is 3%, and the market risk premium is 7%. Elliott's combined federal-plus-state tax rate is 25%.
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What is Elliott's cost of equity? Do not round intermediate calculations. Round your answer to two decimal places.
%
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What is its weighted average cost of capital? Do not round intermediate calculations. Round your answer to two decimal places.
%
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What is its unlevered cost of equity? Do not round intermediate calculations. Round your answer to two decimal places.
%
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
