If wild widgets inc were an all-equity company it would, Ask an Expert

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If Wild Widgets, Inc., were an all-equity company, it would have a beta of .95. The company has a target debt–equity ratio of .40. The expected return on the market portfolio is 11 percent, and Treasury bills currently yield 4 percent. The company has one bond issue outstanding that matures in 20 years and has a coupon rate of 6.5 percent. The bond currently sells for $1,080. The corporate tax rate is 34 percent. What is the company’s cost of debt? What is the company’s cost of equity? What is the company’s weighted average cost of capital?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92428986

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