If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.3. WWI has a target debt/equity ratio of 0.4. The expected return on the market is 0.17, and Treasury bills are currently selling to yield 0.05. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 6% and are selling for $911.6. The corporate tax rate is 30%.(Round your answers to 2 decimal places before the percentage sign. (e.g., 10.23%))

 

a.	WWI’s before-tax cost of debt is %.
b.	WWI’s cost of equity is %.
c.	WWI’s weighted average cost of capital is

Answer rating: 100% (QA)

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