Question
WACC Comparables - 2 If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 0.9. WWI has a target debt/equity
WACC Comparables - 2 If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 0.9. WWI has a target debt/equity ratio of 1. The expected return on the market is 0.15, and Treasury bills are currently selling to yield 0.03. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 9% and are selling for $958. The corporate tax rate is 35%.(Round your answers to 2 decimal places before the percentage sign. (e.g., 10.23%)) a. WWIs before-tax cost of debt is %. b. WWIs cost of equity is %. c. WWIs weighted average cost of capital is %.
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