Cost of equity = rU + D/E(rU - rD)
Cost of equity = 0.096 + 0.099/0.901(0.096 - 0.061)
Cost of equity = 0.0998 or 9.98%
Suppose Microsoft has no debt and a WACC of 9.6%. The average debt-to-value ratio for the...
Suppose Microsoft has no debt and a WACC of 9.2%. The average debt-to-value ratio for the software industry is 9.6%. What would be its cost of equity if it took on the average amount of debt for its industry at a cost of debt of 5.8%? The cost of equity is %. (Round to two decimal places.)
Suppose Microsoft has no debt and a WACC of 9.2%. The average debt-to-value ratio for the software industry is 5.1%. What would be its cost of equity if it took on the average amount of debt for its industry at a cost of debt of 5.7%? The cost of equity is ____ %
Brown Industries has a debt-equity ratio of 1.5. Its WACC is 9.6 percent, and its cost of debt is 5.7 percent. There is no corporate tax. a. 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.) b-1. What would the cost of equity be if the debt-equity ratio were 2.0? (Do not round intermediate calculations and enter your answer as a percent...
Brown Industries has a debt-equity ratio of 1.5. Its WACC is 9.6 percent, and its cost of debt is 5.7 percent. There is no corporate tax. a. 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.) b-1. What would the cost of equity be if the debt-equity ratio were 2.0? (Do not round intermediate calculations and enter your answer as a percent...
Brown Industries has a debt-equity ratio of 1.5. Its WACC is 9.6 percent, and its cost of debt is 5.7 percent. There is no corporate tax. 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.) b-1. What would the cost of equity be if the debt-equity ratio were 2.0? (Do not round intermediate calculations and enter your answer as a percent rounded...
Fama’s Llamas has a WACC of 9.6 percent. The company’s cost of equity is 11.8 percent, and its pretax cost of debt is 7.6 percent. The tax rate is 35 percent. What is the company’s target debt–equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) Debt–equity ratio
Blitz Industries has a debt-equity ratio of 1.4. Its WACC is 8.4 percent, and its cost of debt is 6.1 percent. The corporate tax rate is 21 percent. a. 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.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to...
Problem 16-12 Calculating WACC [LO1] Blitz Industries has a debt-equity ratio of 1.6. Its WACC is 7.8 percent, and its cost of debt is 5.5 percent. The corporate tax rate is 21 percent. a. 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.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a...
Problem 16-12 Calculating WACC [LO1] Blitz Industries has a debt-equity ratio of 1.6. Its WACC is 7.8 percent, and its cost of debt is 5.5 percent. The corporate tax rate is 21 percent. a. 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.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer...
Dickson, Inc., has a debt-equity ratio of 2.6. The firm's weighted average cost of capital is 9 percent and its pretax cost of debt is 7 percent. The tax rate is 24 percent. a. 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.) b. What is the company's unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer...