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What is the company unlevered cost of equity capital

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Question - Dickson, Inc., has a debt-equity ratio of 2.3. The firm's weighted aver-age cost of capital is 10 percent and its pretax cost of debt is 6 percent. The tax rate is 24 percent.

a. What is the company's cost of equity capital?

b. What is the company's unlevered cost of equity capital?

c. What would the company's weighted average cost of capital be if the firm's debt-equity ratio were .75? What if it were 1.3?

Reference no: EM132768391

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