Shadow Corp. has no debt but can borrow at 8 percent. The firm's WACC is currently 9.8 percent, and the tax rate is 35 percent.

**a.**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.)**

Cost of equity %

**b.**If the company converts to 15 percent debt, what will its cost of equity be? **(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

Cost of equity %

**c.**If the company converts to 50 percent debt, what will its cost of equity be?** (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

Cost of equity %

**d-1.**If the company converts to 15 percent debt, what will the company's WACC be?

WACC %

**d-2.**If the company converts to 50 percent debt, what will the company's WACC be?

WACC

#### Top Answer

Let me explain the... View the full answer

- A. is the only one that is correct. Please correct and help as needed.
- crystaldncn
- May 03, 2018 at 2:22pm