70.2K

Verified Solution

Link Copied!

Unida Systems has million shares outstanding trading for per share. In addition, Unida has million in outstanding debt. Suppose Unida's equity cost of capital is , its debt cost of capital is , and the corporate tax rate is . a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is 12.7%. (Round to one decimal place.) b. What is Unida's after-tax debt cost of capital? Unida's after-tax debt cost of capital is 5.4%. (Round to one decimal place.) c. What is Unida's weighted average cost of capital? Unida's weighted average cost of capital is nothing%. (Round to one decimal place.)

Unida Systems has 34 million shares outstanding trading for $8 per share. In addition, Unida has $94 million in outstanding debt. Suppose Unida's equity cost of capital is 14%, its debt cost of capital is 9%, and the corporate tax rate is 40% a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is 12.7%. (Round to one decimal place.) b. What is Unida's after-tax debt cost of capital? Unida's after-tax debt cost of capital is 5.4%. (Round to one decimal place.) c. What is Unida's weighted average cost of capital? Unida's weighted average cost of capital is %. (Round to one decimal place.)

Answer & Explanation Solved by verified expert

See Answer