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Kose, Inc., has a target debt-equity ratio of 1.50. Its WACC is 8 percent, and the tax rate is35 percent. If the company's cost of
Kose, Inc., has a target debt-equity ratio of 1.50. Its WACC is 8 percent, and the tax rate is35 percent. If the company's cost of equity is 14 percent, what is its pretax cost of debt? If instead you know that the aftertax cost of debt is 4.1 percent, what is the cost of equity? (Answer in that order.)
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