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Williamson, Inc., has a debt-equity ratio of 2.54. The company's weighted average cost of capital is 9 percent, and its pretax cost of debt is
Williamson, Inc., has a debt-equity ratio of 2.54. The company's weighted average cost of capital is 9 percent, and its pretax cost of debt is 7 percent. The corporate tax rate is 40 percent. a. What is the company's cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity capital % b. What is the company's unlevered cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Unlevered cost of equity % c. What would the weighted average cost of capital be if the company's debt-equity ratio were 80 and 1.70? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
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