Williamson, Inc., has a debt-equity ratio of 2.5. The firm's weighted average cost of capital is 15 percent, and its pretax cost of debt is 10 percent. Williamson is subject to a corporate tax rate of 35 percent.
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What is Williamson's cost of equity capital?
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What is Williamson's unlevered cost of equity capital?
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What would Williamson's weighted average cost of capital be if the firm's debt-equity ratio were .75? What if it were 1.5?