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Cunningham Inc. has a target debt-equity ratio of .41, its WACC is 9.6 percent, and the tax rate is 22 percent. a. If the company's

Cunningham Inc. has a target debt-equity ratio of .41, its WACC is 9.6 percent, and the tax rate is 22 percent.

a. If the company's cost of equity is 12 percent, what is its pretax cost of debt?

b. If instead, you know that the aftertax cost of debt is 6.1 percent, what is the cost of equity?

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