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# Twice Shy Industries has a debtAc equity ratio of 16 Its WACC is 86 percent and its cost of debt is 61 percent The corporate tax rate is 35 percent a What is the companyAc€cs cost of equity

Twice Shy Industries has a debtAcˆ’equity ratio of 1.6. Its WACC is 8.6 percent, and its cost of debt is 6.1 percent. The corporate tax rate is 35 percent.

a. What is the companyAc€?cs cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity capital %

b. What is the companyAc€?cs unlevered cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Unlevered cost of equity capital %

c-1 What would the cost of equity be if the debtAcˆ’equity ratio were 2? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %

c-2 What would the cost of equity be if the debtAcˆ’equity ratio were 1.0? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %

c-3 What would the cost of equity be if the debtAcˆ’equity ratio were zero? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %

May 19 2020 View more View Less Subscribe To Get Solution