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Williamson, Inc., has a debt-equity ratio of 2.42. The company's weighted average cost of capital is 10 percent, and its pretax cost of debt is
Williamson, Inc., has a debt-equity ratio of 2.42. The company's weighted average cost of capital is 10 percent, and its pretax cost of debt is 6 percent. The corporate tax rate is 23 percent. a. What is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company's unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What would the weighted average cost of capital be if the company's debt-equity ratio were 70 and 1.85? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) % a. Cost of equity b. Unlevered cost of equity c. WACC at debt-equity ratio of.70 WACC at debt-equity ratio of 1.85 % % %
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