Question
Unlevered Cost of Equity Elliott's Cross Country Transportation Services has a capital structure with 25% debt at a 7% interest rate. Its beta is 1.4,
Unlevered Cost of Equity
Elliott's Cross Country Transportation Services has a capital structure with 25% debt at a 7% interest rate. Its beta is 1.4, the risk-free rate is 4%, and the market risk premium is 9%. 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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Investment Analysis And Portfolio Management
Authors: Frank K. Reilly, Peggy L. Hedges, Philip Chang, Keith C. Brown, Hedges Reilly Brown
1st Canadian Edition
0176500693, 978-0176500696
