Unida Systems has 32 million shares outstanding trading for $12 per share. Inaddition, Unida has $98 million in outstanding debt. Suppose Unida's equity cost of capital is 14%, its debt cost of capital is 7%, and the corporate tax rate is 39%.
a. What is Unida's unlevered cost of capital?
b. What is Unida's after-tax debt cost of capital?
c. What is Unida's weighted average cost of capital?