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Williamson, Inc., has a debt-equity ratio of 2.6. The company's weighted average cost of capital is 9 percent, and its pretax cost of debt is

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Williamson, Inc., has a debt-equity ratio of 2.6. 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? Cost of equity capital _______ % b. What is the company's unlevered cost of equity capital? Unlevered cost of equity _______ % c. What would the company's weighted average cost of capital be if the company's debt-equity ratio were .80 and 1.80? Weighted average cost of capital Debt-equity ratio = .80 _______ % Debt-equity ratio = 1.80 _______ %

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