Question
Ursala, Incorporated, has a target debt-equity ratio of .95. Its WACC is 8.3 percent, and the tax rate is 23 percent. a. If the companys
| Ursala, Incorporated, has a target debt-equity ratio of .95. Its WACC is 8.3 percent, and the tax rate is 23 percent. |
| a. | If the companys cost of equity is 11 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 6.4 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.) |
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Human Resource Management
Authors: Raymond J. Stone, Anne Cox, Mihajla Gavin
10th Edition
9780730385356
