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Starset, Inc., has a target debt-equity ratio of 0.77. Its WACC is 11 percent, and the tax rate is 32 percent. a. If the company's

Starset, Inc., has a target debt-equity ratio of 0.77. Its WACC is 11 percent, and the tax rate is 32 percent.

a. If the company's cost of equity is 16.5 percent, what is the pretax cost of debt?

b. If instead you know that the aftertax cost of debt is 6.6 percent, what is the cost of equity?

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