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

# If Wild Widgets, Inc., were an all-equity company, it would have a be.docx

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If Wild Widgets, Inc., were an all-equity company, it would have a beta of .85. The company has a target debt-equity ratioof .40. The expected return on the market portfolio is 10 percent and Treasury bills currently yield 2.8 percent. The company has one bond issue outstanding that matures in 15 years, a par value of \$1,000, and a coupon rate of 5.8 percent. The bond currently sells for \$1,040. The corporate tax rate is 21 percent. a. What is the company's cost of debt? (Do not round intermediate calculations and enter 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 round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the company's weighted average cost of capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 401% Cost of debt b. Cost of equity c. WACC National Electric Company (NEC) is considering a \$45.02 million project in its power systems division. Tom Edison,