If Wild Widgets, Inc., were an all-equity company, it would have a beta of .90. The...

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If Wild Widgets, Inc., were an all-equity company, it would havea beta of .90. The company has a target debt-equity ratio of .60.The expected return on the market portfolio is 11 percent andTreasury bills currently yield 3.3 percent. The company has onebond issue outstanding that matures in 26 years, a par value of$2,000, and a coupon rate of 6 percent. The bond currently sellsfor $2,130. The corporate tax rate is 24 percent.
a. What is the company’s cost of debt? (Do not roundintermediate calculations and enter your answer as a percentrounded 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’s weighted average cost of capital? (Donot round intermediate calculations and enter your answer as apercent rounded to 2 decimal places, e.g., 32.16.)

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If Wild Widgets, Inc., were an all-equity company, it would havea beta of .90. The company has a target debt-equity ratio of .60.The expected return on the market portfolio is 11 percent andTreasury bills currently yield 3.3 percent. The company has onebond issue outstanding that matures in 26 years, a par value of$2,000, and a coupon rate of 6 percent. The bond currently sellsfor $2,130. The corporate tax rate is 24 percent.a. What is the company’s cost of debt? (Do not roundintermediate calculations and enter your answer as a percentrounded 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’s weighted average cost of capital? (Donot round intermediate calculations and enter your answer as apercent rounded to 2 decimal places, e.g., 32.16.)