Weston Industries has a debt-equity ratio of 1.4. Its WACC is 8 percent, and its cost of debt is 5.9%. The Corporate tax rate is 35%.
a. What is Weston's cost of equity capital?
b. What is Weston's unlevered cost of equity capital?
c-1. What would the cost of equity be if the debt-equity were 2?
c-2. What would the cost of equity be if the debt-equity ratio were 1?
c-3. What would the cost of equity be if the debt-equity ratio were 0?