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Ursala, Incorporated, has a target debt-equity ratio of 70 . Its WACC is 9.2 percent, and the tax rate is 21 percent. a. If the
Ursala, Incorporated, has a target debt-equity ratio of 70 . Its WACC is 9.2 percent, and the tax rate is 21 percent. a. If the company's cost of equity is 12 percent, what is its pretax cost of debt? Note: 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 5.7 percent, what is the cost of equity? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16
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