Citee Corp. has no debt but can borrow at 6.2 percent. The firm’s WACC is currently...

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Citee Corp. has no debt but can borrow at 6.2 percent. Thefirm’s WACC is currently 8.5 percent, and the tax rate is 25percent. a. What is the company’s cost of equity? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) b. If the firm convertsto 15 percent debt, what will its cost of equity be? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) c. If the firm convertsto 40 percent debt, what will its cost of equity be? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) d-1. If the firmconverts to 15 percent debt, what is the company’s WACC? (Do notround intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) d-2. If the firmconverts to 40 percent debt, what is the company’s WACC?

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Answer a Unlevered cost of equity WACC if no debt Unlevered cost of equity 850 Answer b Weight of debt 15 Weight of equity 85 Debtequity ratio Weight of debt Weight of equity Debtequity ratio 015 085 Debtequity ratio 017647 See Answer

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Citee Corp. has no debt but can borrow at 6.2 percent. Thefirm’s WACC is currently 8.5 percent, and the tax rate is 25percent. a. What is the company’s cost of equity? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) b. If the firm convertsto 15 percent debt, what will its cost of equity be? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) c. If the firm convertsto 40 percent debt, what will its cost of equity be? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) d-1. If the firmconverts to 15 percent debt, what is the company’s WACC? (Do notround intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) d-2. If the firmconverts to 40 percent debt, what is the company’s WACC?