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Show your work: ABC Ltd has a target debt-equity ratio of .65. Its WACC is 9.9%, and the tax rate is 35%. If ABC Ltds

Show your work:

ABC Ltd has a target debt-equity ratio of .65. Its WACC is 9.9%, and the tax rate is 35%.

  1. If ABC Ltds cost of equity is 14%, what is its pre-tax cost of debt? (10 pts)
  2. If instead you know that the after-tax cost of debt is 6.8%, what is the cost of equity? (10pts)

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