9. Satish Kumar, CEO of Vanguard Enterprises is trying to figure out the cost of debt and equity. a. Vanguard's balance sheet has total debt of 200 million and Vanguard's total interest burden for the forthcoming year will be 24 million. Satish argues, "We owe 200 million and we will pay 24 million interest. So the cost of our debt is 12 percent (24/200)." What is the flaw in this argument? b. Vanguard's equity currently sells for 100 per share and the dividend per share will probably be 6. Satish reasons "Since we plan to pay a dividend of 6 per share which has a market price of 100 our cost of equity is 6 percent". What is the error in this reasoning? has 20 million equity shares outstanding. The book value per share is 40 The