Question
Williamson, Inc., has a debtequity ratio of 2.48. The firms weighted average cost of capital is 10 percent, and its pretax cost of debt is
Williamson, Inc., has a debtequity ratio of 2.48. The firms weighted average cost of capital is 10 percent, and its pretax cost of debt is 6 percent. Williamson is subject to a corporate tax rate of 35 percent. a. What is Williamsons cost of equity capital? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Cost of equity capital % b. What is Williamsons unlevered cost of equity capital? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Unlevered cost of equity %
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