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Ursala, Incorporated, has a target debt-equity ratio of .65. Its WACC is 10.4 percent, and the tax rate is 23 percent. a. If the
Ursala, Incorporated, has a target debt-equity ratio of .65. Its WACC is 10.4 percent, and the tax rate is 23 percent. a. If the company's cost of equity is 14 percent, what is its pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If instead you know that the aftertax cost of debt is 5.8 percent, what is the cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. a. Cost of 10.99 % debt b. Cost of 18.94 % equity
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