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Williamson, Inc., has a debtequity ratio of 2.5. The firms weighted average cost of capital is 10 percent, and its pretax cost of debt is

Williamson, Inc., has a debtequity ratio of 2.5. 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?

B) What is Williamsons unlevered cost of equity capital?

C) What would Williamsons weighted average cost of capital be if the firms debtequity ratio were .75 and 1.5?

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