Question
In: Finance
Williamson, Inc., has a debt−equity ratio of 2.40. The company'sweighted average cost of capital is...
Williamson, Inc., has a debt−equity ratio of 2.40. 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. 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 1.95? (Do not
round intermediate calculations. Enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
| Weighted
average cost of capital |
|
| Debt–equity ratio .80 | |
| Debt–equity ratio 1.95 | |
Solutions
jeff jeffy answered 3 years agoRelated Solutions
Williamson, Inc., has a debt–equity ratio of 2.43. The company's weighted average cost of capital is...
Williamson, Inc., has a debt–equity ratio of 2.43. 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.
What would the company’s weighted average cost of capital be if
the company's debt–equity ratio were .65 and 1.80? (Do not round
intermediate calculations and enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
Williamson, Inc., has a debt–equity ratio of 2.54. The company's weighted average cost of capital 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 and 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?...
Dickson, Inc., has a debt-equity ratio of 2.75. The firm’s weighted average cost of capital is...
Dickson, Inc., has a debt-equity ratio of 2.75. The firm’s
weighted average cost of capital is 12 percent and its pretax cost
of debt is 8 percent. The tax rate is 22 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...
Dickson, Inc., has a debt-equity ratio of 2.05. The firm’s weighted average cost of capital is...
Dickson, Inc., has a
debt-equity ratio of 2.05. The firm’s weighted average cost of
capital is 11 percent and its pretax cost of debt is 8 percent. The
tax rate is 23 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...
Dickson, Inc., has a debt-equity ratio of 2.5. The firm’s weighted average cost of capital is...
Dickson, Inc., has a
debt-equity ratio of 2.5. The firm’s weighted average cost of
capital is 11 percent and its pretax cost of debt is 9 percent. The
tax rate is 22 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...
Dickson, Inc., has a debt-equity ratio of 2.7. The firm’s weighted average cost of capital is...
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...
Dickson, Inc., has a debt-equity ratio of 2.55. The firm’s weighted average cost of capital is...
Dickson, Inc., has a debt-equity ratio of 2.55. The firm’s
weighted average cost of capital is 12 percent and its pretax cost
of debt is 10 percent. The tax rate is 23 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...
Dickson, Inc., has a debt-equity ratio of 2.5. The firm’s weighted average cost of capital is...
Dickson, Inc., has a debt-equity ratio of 2.5. The firm’s
weighted average cost of capital is 11 percent and its pretax cost
of debt is 9 percent. The tax rate is 22 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...
Restex has a debt-equity ratio of 0.76, an equity cost of capital of 18 %, and a debt cost of capital of 9 %.
Restex has a debt-equity ratio of 0.76, an equity cost of capital of 18 %, and a debt cost of capital of 9 %.
Restex's corporate tax rate is 30%, and its market capitalization is $ 199 million.
a. If? Restex's free cash flow is expected to be $5 million one year from now and will grow at a constant? rate, what expected future growth rate is consistent with?Restex's current market? value?
b. Estimate the value of Restex's interest tax...
Safeassign Corp. has a debt to equity ratio of .85. Its Weighted average cost of capital...
Safeassign Corp. has a debt to equity ratio of .85. Its
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If Safeassign’s after-tax cost of debt is 6.8%, what is the cost of
equity?
ii. Safeassign Corp. has a debt to equity ratio of .85. Its
Weighted average cost of capital is 9.9% and the tax rate is 35%.
If Safeassign’s cost of equity is 14% what is the pre-tax cost of
debt?
iii. Safegaurd Inc....
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