Skillet Industries has a debt–equity ratio of 1.7. Its WACC is 9.2 percent, and its cost of debt is 6.2 percent. The corporate tax rate is 35 percent.

  

a.	What is the company’s cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16))

  

Cost of equity capital

%

b.	What is the company’s unlevered cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16))

  

Unlevered cost of equity capital

%

  

c-1	What would the cost of equity be if the debt–equity ratio were 2? (Round your answer to 2 decimal places. (e.g., 32.16))

  

Cost of equity

%

  

c-2	What would the cost of equity be if the debt–equity ratio were 1.0? (Round your answer to 2 decimal places. (e.g., 32.16))

  

Cost of equity

%

  

c-3	What would the cost of equity be if the debt–equity ratio were zero? (Round your answer to 2 decimal places. (e.g., 32.16))

  

Cost of equity

%

Answer rating: 100% (QA)

Given information DebtEquity Ratio DE 17 Weighted Average Cost of Capital WACC 92 Cost of Debt kd 62 Corporate Tax Rate 35 a Cost of Equity Capital ke ... View the full answer