In: Finance
Dickson, Inc., has a debt-equity ratio of 2.7. The firm’s weighted average cost of capital is 11 percent and its pretax cost of debt is 7 percent. The tax rate is 21 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.) |
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.) |
c. | What would the company’s weighted average cost of capital be if the company's debt-equity ratio were .40 and 1.70? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |