Question
Starset, Inc., has a target debt-equity ratio of 0.81. Its WACC is 11.5 percent, and the tax rate is 33 percent. If the company's cost
| Starset, Inc., has a target debt-equity ratio of 0.81. Its WACC is 11.5 percent, and the tax rate is 33 percent. |
| If the company's cost of equity is 16 percent, what is the pretax cost of debt? |
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| If instead you know that the aftertax cost of debt is 5.8 percent, what is the cost of equity? |
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Financial Markets And Institutions
Authors: Frederic S. Mishkin
2nd Edition
0321014650, 9780321014658
