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Kose, Inc., has a target debtequity ratio of .45. Its WACC is 11.2 percent, and the tax rate is 35 percent. a. If Koses cost

Kose, Inc., has a target debtequity ratio of .45. Its WACC is 11.2 percent, and the tax rate is 35 percent.

a. If Koses cost of equity is 15 percent, what is its pretax cost of debt?

b. If instead you know that the aftertax cost of debt is 6.4 percent, what is the cost of equity?

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