NACC Calculation Weston's debt-to-equity ratio is 1.4, the company's WACC is 8.3%, and its debt-to-equity ratio is 5.4% The corporate tax rate is 35 percent. a. What is the capital cost of Weston? b. What is Weston's debt-free cost of equity capital? c. If the debt-to-equity ratio was 2, what would the cost of equity be? If the debt ratio is 1, what is it? The debt ratio How much is zero?

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To calculate the various components of the NACC Net Aftertax Cash Flow calculation for Weston well need the following information DebttoEquity Ratio 14 WACC Weighted Average Cost of Capital 83 Tax Rate 35 a Capital Cost of Weston The capital cost of Weston can be calculated using the WACC formula The WACC is a weighted average of the cost of debt and the cost of equity based on the respective proportions of debt and equity in the capital structure WACC Weight of Debt Cost of Debt Weight of Equity Cost of Equity Given the debttoequity ratio we can calculate the weights of debt and equity as follows Weight of Debt DebttoEquity Ratio 1 ... View the full answer