What is unida”s unlevered cost of capital/ Finance
Unida Systems has 40 million shares outstanding trading for $10 per share. In addition, Unida has $100 million in outstanding debt. Suppose Unida’s equity cost of capital is 15%, its debt cost of capital is 8%, 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?
