Dickson, Inc
Subject:AccountingPrice:2.86 Bought5
Dickson, Inc., has a debt-equity ratio of 2.35. The firm's weighted average cost of capital is 12 percent and its pretax cost of debt is 9 percent. The tax rate is 24 percent.
a) What is the company's cost of equity capital?
b) What is the company's unlevered cost of equity capital?
c) What would the company's weighted average cost of capital be if the company's debt-equity ratio was 1.35?
