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Starset, Incorporated, has a target debt-equity ratio of 0.87. Its WACC is 11 percent, and the tax rate is 31 percent. If the company's
Starset, Incorporated, has a target debt-equity ratio of 0.87. Its WACC is 11 percent, and the tax rate is 31 percent. If the company's cost of equity is 16 percent, what is the pretax cost of debt? Cost of debt 7.61% 14.86% 9.64% 8.34% 7.28% If instead you know that the aftertax cost of debt is 6.5 percent, what is the cost of equity? Cost of equity 14.92% 41.12% 16.17% 15.52% 14.32%
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