What is the cost of equity for a firm with D-E ratio

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1. Thomas purchased 6,562 shares of EKK stock for $132,393 one year ago. The stock pays annual dividends of $1.46 a share. Today, each share is worth $46.67. What is Thomas’ total dollar return on this investment?

2. ABC Company has a cost of equity of 24.46 percent and a pre-tax cost of debt of 7.07 percent. The firm's target weighted average cost of capital is 13.97 percent and its tax rate is 39.86 percent. What is the firm's D/E ratio?

3. ABC has an unlevered cost of capital (Ra) of 15.07%, a cost of debt of 4.34% and a tax rate of 0%. What is the cost of equity for a firm (Rs) with a D/E ratio of 0.53?

Reference no: EM131863031

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