Crosby Industries has a debt–equity ratio of 1.6. Its WACC is 12 percent, and its cost of debt is 9 percent. There is no corporate tax.
a. What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Cost of equity %
b. What would the cost of equity be if the debt–equity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.)
Cost of equity %
What would the cost of equity be if the debt–equity ratio were .4? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Cost of equity %
What would the cost of equity be if the debt–equity ratio were zero? (Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.)
Cost of equity %