Question: please explain your answer Weston Industries has a debt-equity ratio of .7. Its WACC is 9.3 percent, and its cost of debt is 6.4 percent.


please explain your answer


Weston Industries has a debt-equity ratio of .7. Its WACC is 9.3 percent, and its cost of debt is 6.4 percent. The corporate tax rate is 24 percent. c-1. c-2. c-3. What is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the company's unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What would the cost of equity be if the debt-equity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What would the cost of equity be if the debt-equity ratio were 1.0? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What would the cost of equity be if the debt-equity ratio were zero? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity Unlevered cost of equity Cost of equity Cost of equity Cost of equity Cede 8: Co. expects its EBIT to be $105,000 every year forever. The company can borrow at 6 percent. The company currently has no debt and its cost of equity is 13 percent. a. If the tax rate is 24 percent, what is the value of the company? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the value be if the company borrows $205,000 and uses the proceeds to repurchase shares? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
