If Wild Widgets, Inc., were an all-equity company, it would have a beta of .85. The...

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If Wild Widgets, Inc., were an all-equity company, it would havea beta of .85. The company has a target debt-equity ratio of .40.The expected return on the market portfolio is 10 percent andTreasury bills currently yield 2.8 percent. The company has onebond issue outstanding that matures in 15 years, a par value of$1,000, and a coupon rate of 5.8 percent. The bond currently sellsfor $1,040. The corporate tax rate is 21 percent. a. What is thecompany’s cost of debt? (Do not round intermediate calculations andenter your answer as a percent rounded to 2 decimal places, e.g.,32.16.) b. 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.) c. What is the company’sweighted average cost of capital? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2decimal places, e.g., 32.16.)

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If Wild Widgets, Inc., were an all-equity company, it would havea beta of .85. The company has a target debt-equity ratio of .40.The expected return on the market portfolio is 10 percent andTreasury bills currently yield 2.8 percent. The company has onebond issue outstanding that matures in 15 years, a par value of$1,000, and a coupon rate of 5.8 percent. The bond currently sellsfor $1,040. The corporate tax rate is 21 percent. a. What is thecompany’s cost of debt? (Do not round intermediate calculations andenter your answer as a percent rounded to 2 decimal places, e.g.,32.16.) b. 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.) c. What is the company’sweighted average cost of capital? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2decimal places, e.g., 32.16.)