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Jungle, Inc., has a target debtequity ratio of 0.81. Its WACC is 11.5 percent, and the tax rate is 33 percent. Required: (a) If Jungle's
Jungle, Inc., has a target debtequity ratio of 0.81. Its WACC is 11.5 percent, and the tax rate is 33 percent. |
Required: |
(a) | If Jungle's cost of equity is 16.5 percent, what is the pretax cost of debt? (Do not round your intermediate calculations.) |
(Click to select)8.69%15.41%7.95%11.12%7.61% |
(b) | If instead you know that the aftertax cost of debt is 5.7 percent, what is the cost of equity? (Do not round your intermediate calculations.) |
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