Homework answers / question archive / Dickson, Inc

Dickson, Inc

Finance

Share With

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.)