Reference no: EM131347304
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? (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? (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 %
c. What would the company’s weighted average cost of capital be if the company's debt–equity ratio were .80 and 1.80? (Do not round intermediate calculations and 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 = 1.80 % =
|
What is the company target debt–equity ratio
: Fama’s Llamas has a WACC of 10.3 percent. The company’s cost of equity is 13.2 percent, and its pretax cost of debt is 8.9 percent. The tax rate is 40 percent. What is the company’s target debt–equity ratio?
|
|
List the 12 cities where the district banks are located
: Briefly describe the functions the Fed performs for the banking community. In what sense is the Fed the bankers' bank?
|
|
What is the value today of dietrich debt and equity
: Steinberg Corporation and Dietrich Corporation are identical companies except that Dietrich is more levered. Both companies will remain in business for one more year. What is the value today of Steinberg's debt and equity? What is the value today of..
|
|
What is difference between thinking and thinking critically
: Consider the following questions to guide your definition: What does it mean to think critically? What is the difference between thinking and thinking critically?
|
|
What is the company unlevered cost of equity capital
: 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. What is the company’s cost of equity capital? What is the c..
|
|
Why the curves have the slopes they do
: Draw a graph showing equilibrium in the money market. Carefully label all curves and axes and explain why the curves have the slopes they do.
|
|
What is cost of equity after recapitalization
: Bruce & Co. expects its EBIT to be $83,000 every year forever. The company can borrow at 11 percent. The company currently has no debt, its cost of equity is 15 percent, and the tax rate is 35 percent. The company borrows $144,000 and uses the procee..
|
|
To what extent does age influence length of hospital
: IHP 525 : To what extent does follow-up time after hospitalizal after controlling for BMI? stay for MI patients? stay for MI patients? To what extent does follow-up time after hospitalization influence survival rates of MI patients after controlling..
|
|
What would cost of equity be if debt–equity ratio were zero
: Weston Industries has a debt–equity ratio of 1.2. Its WACC is 9.4 percent, and its pretax cost of debt is 6.5 percent. The corporate tax rate is 35 percent. What is the company’s cost of equity capital? What would the cost of equity be if the debt–eq..
|