Business, 19.03.2021 18:20 annjetero2oy23ay

If Wild Widgets, Inc., were an all-equity company, it would have a beta of 1.15. The company has a target debt-equity ratio of .80. The expected return on the market portfolio is 12 percent and Treasury bills currently yield 3.7 percent. The company has one bond issue outstanding that matures in 30 years, a par value of $2,000, and a coupon rate of 6.4 percent. The bond currently sells for $2,090. The corporate tax rate is 23 percent. Required:
a. What is the companyâ€™s cost of debt?
b. What is the companyâ€™s cost of equity?
c. What is the companyâ€™s weighted average cost of capital?

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If Wild Widgets, Inc., were an all-equity company, it would have a beta of 1.15. The company has a t...

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