Skillet Industries has a debt–equity ratio of 1.5. Its WACC is 9 percent, and its cost of debt is 5.5 percent. The corporate tax rate is 35 percent.
a. What is the company’s cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16))
Cost of equity capital %
b. What is the company’s unlevered cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16))
Unlevered cost of equity capital %
c-1. What would the cost of equity be if the debt–equity ratio were 2? (Round your answer to 2 decimal places. (e.g., 32.16))
Cost of equity %
c-2. What would the cost of equity be if the debt–equity ratio were 1.0? (Round your answer to 2 decimal places. (e.g., 32.16))
Cost of equity %
c-3. What would the cost of equity be if the debt–equity ratio were zero? (Round your answer to 2 decimal places. (e.g., 32.16))
Cost of equity %