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Starset, Inc., has a target debt-equity ratio of .80. Its WACC is 9.1 percent, and the tax rate is 25 percent. a. If the companys

Starset, Inc., has a target debt-equity ratio of .80. Its WACC is 9.1 percent, and the tax rate is 25 percent.

a. If the companys cost of equity is 13 percent, what is its pretax cost of debt?

b.	If instead you know that the aftertax cost of debt is 5.8 percent, what is the cost of equity?

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