Wacc at different capital structures

Reference no: EM13129900

Chandeliers Corp. has no debt but can borrow at 7.9 percent. The firm's WACC is currently 9.7 percent, and the tax rate is 35 percent.

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

b. If the firm converts to 35 percent debt, what will its cost of equity be?

c. If the firm converts to 50 percent debt, what will its cost of equity be?

d-1. If the firm converts to 35 percent debt, what is the company's WACC?

d-2. If the firm converts to 50 percent debt, what is the company's WACC?

Reference no: EM13129900

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