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Homework answers / question archive / Dickson, Inc
Dickson, Inc., has a debt-equity ratio of 2.45. The firm's weighted average cost of capital is 10 percent and its pretax cost of debt is 8 percent. The 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 2 decimal places, e.g., 32.16.)
c.What would the company's weighted average cost of capital be if the company's debt-equity ratio were .65 and 1.45? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
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