Question: Empress Corp. has no debt but can borrow at 8.2%. The firm's WACC is currently 11%, and the tax rate is 35%. a) What is

Empress Corp. has no debt but can borrow at 8.2%. The firm's WACC is currently 11%, and the tax rate is 35%.
 a) What is the company's cost of equity?

b) If the firm converts to 25% debt, what will its cost of equity be?

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

d) What is the company's WACC is part (b)? In part (c)?

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