Weston industries has debt-equity ratio

Assignment Help Financial Management

Reference no: EM131528526

Weston Industries has a debt-equity ratio of 1.5. Its WACC is 12 percent, and its cost of debt is 10 percent. The corporate tax rate is 34 percent. (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16))

Required:

a. Weston’s cost of equity capital is ---------- percent.

b. Weston’s unlevered cost of equity capital is ------------ percent.

c. The cost of equity would be ------------- percent if the debt-equity ratio were 2, --------------percent if the debt-equity ratio were 1, and -----------------percent if the debt-equity ratio were 0.

Reference no: EM131528526

Questions Cloud

How does dell operate with such a low current ratio : How does Dell operate with such a low current ratio? Why does Dell operate with such a low current ratio?

Tool manufacturing has an expected ebit : Tool Manufacturing has an expected EBIT of $ 38,000 in perpetuity and a tax rate of 36 percent.

Optimal order size and minimum total annual inventory cost : Determine the optimal order size and the minimum total annual inventory cost.

What is the debt-to-value ratio : What is the value of the company's equity? What is the debt-to-value ratio?

Weston industries has debt-equity ratio : Weston Industries has a debt-equity ratio of 1.5. Its WACC is 12 percent, and its cost of debt is 10 percent.

Arithmetic and geometric returns for stock : What are the arithmetic and geometric returns for the stock?

What is the standard deviation of the stock returns : What is the standard deviation of the stock’s returns?

Low-volatility project is undertaken-high-volatility project : What is the expected value of the company if the low-volatility project is undertaken? The high-volatility project?

Calculate canyons cost of retained earnings : Canyon’s investment banker charges 7 percent when new common stock is issued. Calculate Canyon’s cost of retained earnings.

User Account

All Pages