P14-14 WACC (LO3] Starset, Inc., has a target debt-equity ratio of 0.75. Its WACC is 11.5 percent, and the tax rate is 35 percent. If the company's cost of equity is 16 percent, what is the pretax cost of debt? M If instead you know that the aftertax cost of debt is 7 percent, what is the cost of equity