Williamson inc has a debt-equity ratio of 25 the firmrsquos, Ask an Expert

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Williamson, Inc., has a debt-equity ratio of 2.5. The firm’s WACC is 15%, and its pretax cost of debt is 10%. Williamson is subject to a corporate tax rate of 35%. 1) What is Williamson’s cost of equity capital? 2) What is Williamson’s unlevered cost of capital? 3) What would Williamson’s WACC be if the firm’s debt-equity ratio were .75? What if it were 1.5?

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