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Williamsen GmbH has a debt to equity ratio of 2 . 5 . The firm s weighted average cost of capital is 1 5 per

Williamsen GmbH has a debt to equity ratio of 2.5. The firms weighted average cost of capital is 15 per cent, and its cost of debt is 10 per cent. Suppose that there is no corporate tax.
a) What is Williamsens cost of equity capital?
b) What is Williamsens unlevered cost of equity capital?
c) What would Williamsens weighted average cost of capital be if the firm was
unlevered?

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