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Santas Workshops Inc. has a debt-equity ratio of 1.2. Its WACC is 11.3%. Its tax rate is 34%. If Santas cost of equity is 18%,

  1. Santas Workshops Inc. has a debt-equity ratio of 1.2. Its WACC is 11.3%. Its tax rate is 34%.
    1. If Santas cost of equity is 18%, what is the pre-tax cost of debt?
    2. On the other hand and ignoring (a), suppose you had known that the after tax cost of debt was 7.5%, what is the cost of equity?

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