Jungle, Inc., has a target debtequity ratio of 0.84. Its WACC is 11.5 percent, and the tax
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Question:
Jungle, Inc., has a target debtequity ratio of 0.84. Its WACC is 11.5 percent, and the tax rate is 34 percent.
Required:
(a)
If Jungle's cost of equity is 14.5 percent, its pretax cost of debt is percent.
(b) If instead you know the aftertax cost of debt is 6.5 percent, the cost of equity is percent.
Related Book For
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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