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A firm has a target debt to equity ratio of 1.05. Its WACC is 9.4% and its tax rate is 35%. a. If the cost

A firm has a target debt to equity ratio of 1.05. Its WACC is 9.4% and its tax rate is 35%. a. If the cost of equity is 14%, what is the pre-tax cost of debt? b. If instead you are told that the after-tax cost of debt is 6.8%, what is the cost of equity?

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