Question
Starset, Inc., has a target debt-equity ratio of 0.78. Its WACC is 10.5 percent, and the tax rate is 34 percent. If the company's cost
Starset, Inc., has a target debt-equity ratio of 0.78. Its WACC is 10.5 percent, and the tax rate is 34 percent.
If the company's cost of equity is 17 percent, what is the pretax cost of debt?
If instead you know that the aftertax cost of debt is 7 percent, what is the cost of equity?
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett
6th Edition
0077211332, 9780077211332
