Crosby industries has a debt-equity ratio of 15 its wacc is, Ask an Expert

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Crosby Industries has a debt-equity ratio of 1.5. Its WACC is 8.5 percent, and its cost of debt is 6 percent. There is no corporate tax.

Required:

What would the cost of equity be if the debt-equity ratio were 2.0?
What would the cost of equity be if the debt-equity ratio were 0.5?
What would the cost of equity be if the debt-equity ratio were zero?

Note: Please show how to work it out.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162140

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