Cost of equity capital and unlevered cost of equity

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Reference no: EM131522334

Williamson, Inc., has a debt–equity ratio of 2.59. The company's weighted average cost of capital is 10 percent, and its pretax cost of debt is 6 percent. The corporate tax rate is 35 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 .75 and 1.70? (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 = .75 %

Debt–equity ratio = 1.70 %

Reference no: EM131522334

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