What is shadows cost of equity

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Reference no: EM131082838

Shadow Corp. has no debt but can borrow at 7.6 percent. The firm’s WACC is currently 9.4 percent, and the tax rate is 35 percent.

a. What is Shadow’s cost of equity? (Do not round intermediate calculations.)

b. If the firm converts to 25 percent debt, what will its cost of equity be? (Do not round intermediate calculations and round your final answer to 2 decimal places.

c. If the firm converts to 50 percent debt, what will its cost of equity be? (Do not round intermediate calculations and round your final answer to 2 decimal places.

d-1 If the firm converts to 25 percent debt, what will the company's WACC be? (Do not round intermediate calculations and round your final answer to 2 decimal places.

d-2 If the firm converts to 50 percent debt, what will the company's WACC be? (Do not round intermediate calculations and round your final answer to 2 decimal places.

Reference no: EM131082838

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