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Williamson, Inc., has a debt-equity ratio of 2.52. The company's weighted average cost of capital is 11 percent, and its pretax cost of debt is
Williamson, Inc., has a debt-equity ratio of 2.52. The company's weighted average cost of capital is 11 percent, and its pretax cost of debt is 5 percent. The corporate tax rate is 30 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.) Cost of equity capital 29.9() 0% 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.) Unlevered cost of equity 14.01 | 0 % c. What would the company's weighted average cost of capital be if the company's debt-equity ratio were 60 and 1.60? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Weighted average cost 10.07 % 7.54 % of capital Debt-equity ratio .60 Debt-equity ratio = 1.60
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